Self Emp Mortgage 2 years accounts Affordability Calc?

scriblesvurt

Hello, If you have 2 years accounts and are self employed I'm under the understanding that you will be looked at by most High-street Lenders? My question is how do they work out your affordability. I know its Net Profit as a sole trader from your Tax return, but say its 8k year one, 25k year 2, do they go off 25k, or do they average it?

Thanks for any help.

Scribs.

kingstreet

MOST lenders want three years. SOME will accept two.

The lender will normally take the final year as long as it shows a steady increase. They may take an average if they feel the trading record is deteriorating and there may be pressure on future profits.

scriblesvurt

Hi, I thought the majority of High streets would take 2.

jasonblake

i have 2 and seeing a mortgage advisor next week

kingstreet

Halifax, as an example;-

We require verification of 3 years income by way of SA302s, accountants reference or accounts

Some are two, some are three. I'd rather people think the worst and get better, than think the best and get worse!