Mortgage for self employed

mattm3

Hi, I'm thinking of setting up my own business next year. However, I also want to buy a property and as a first time buyer I'm worried this will affect the type and amount of mortgage I can get. Does it affect the mortgage if you are self employed?

Thanks

GMS

You will need 3 years accounts for a mortgage generally, with 2 years plus a projection enough for some lenders, and 1 years for a couple of others.

3 years will give you access to most choice.

What percentage deposit will you have?

Senior_Paper_Monitor

Very much so.

Effectively no-one will lend to you during first year of trading.

Many lenders require three years of trading (and detailed accounts or at least SA tax forms for that period. some will look at two years or possibly even one with current year forecast supported by accountant).

As many self-employed are now realising, the traditional accounting processes used by most and designed to reduce tax liabilities by way of minimising net profits declared work against the ability to borrow on the basis of proved income (self cert est morte!). You will need to prepare your future accounts to demonstrate healthy profits to prove affordability of any mortgage application.

Have no doubt that this is a Government policy to increase tax receipts and will not change in the forseeable future.

Being self employed is not much fun these days - for many reasons and this just one of them