Obtaining a mortgage in principle without an sa302?

Ruthzoo

Hello,

My other half and I have recently had an offer acceptable on our dream home. The offer is subject to the sale of my current property.

My partner has been using a family friend who does some level of mortgage advisory service as part of his business. He was initially confident we would obtain a mortgage in principle but since our offer was accepted, we are having trouble obtaining this. My other half is self employed (I am employed with a permanent contract), his accountant is saying that his tax return (sa302) is not going to be available for 3 weeks. Unfortunately this mortgage advisor doesn!!!8217;t really have much experience in mortgages for self employed so isn!!!8217;t sure if alternative options.

As our offer on the new house was subject to sale, the estate agent is putting pressure on us to get our property on the market soon (we know it will sell quickly as it is in central Edinburgh). I!!!8217;m reluctant to do this until we have a mortgage in principle agreed.

Do you know any alternative ways of securing a mortgage in principle without needing the sa302? We don!!!8217;t really have 3 weeks to spare and are worried we might lose the house if we can!!!8217;t get the flat on the market soon. He has payslips though a large proportion on his salary is dividends. He owns 100% of the shares. We are aware that some mortgage lenders accept accountants statements but we aren't sure which lenders or how do go around applying for this and getting an answer fairly quickly. Any help would be very much appreciated.

ACG

You do not need an SA302 to get a decision in principle (DIP).
You do need it for the full application - although the broker may be reluctant to obtain a DIP without an SA302 for compliance reasons.

I would probably take a view on it, if the accountant is happy to confirm in an email the income figures maybe - but I would take it on a case by case basis.

That being said - 3 weeks to get an SA302 seems wrong. My accountant managed to get mine sorted within 48-72 hours.

Ruthzoo

Thanks very much for your reply. I know, I don't understand why they are saying 3 weeks, they are being pretty unhelpful and I think its just a nuisance to them!

joanne95

My husband is self employed and we couldn!!!8217;t get SA302!!!8217;s but our lender accepted a copy of his last 3 years tax calculations and tax year overviews (which is basically all an SA302 is anyway. We had a bit of a problem with figures not corresponding so the lender just sent our accountants an accountants certificate anyway which was all fine. I was really worried about it all but our broker dealt with it all.

amnblog

An SA302 is a copy of the income figures which can be produced by HMRC following submission of a SA100 self assessment return.

The Tax Calculation is an Accountants calculation of the same figures produced on their own software.

Either item is acceptable to a Lender but it must be accompanied by the Tax Year Overview for the same tax year. This TYO is produced from the HMRC systems following receipt of a SA100 and can be downloaded by Accountants or by the Tax Payer if they submit their own tax return.

It is worth noting that often the tax due figures on the Tax Calculation and Tax Year Overview do not match and Lenders will have a problem where this is the case. The problems occurs where there have been refunds or where the systems round figures up or down. In such a case the Lender will request revised copies or an explanation from the Accountant.

In the case above we must assume the figures sought are for 2017/2018.

Almost all Lenders requests Tax Calcs and TYO's. I know of one that may work from Accounts produced from a qualified Accountant.

As stated by ACG above, the Lender will not ask to see the SA302 figures to produce an offer in principle. Within our business we would not however submit data to request an OIP without the supporting verified income figures.

It appears that the Accountant here is simply unable/not willing to do the work to submit the return to get the required figures out without a three week window to do so.

It is up to the Client to tell the Accountant their expectation or find another Accountant if appropriate.

sal_III

Ruthzoo wrote: »

He has payslips though a large proportion on his salary is dividends. He owns 100% of the shares.

Is he a limited company contractor working for an hourly/daily rate? If so there are specialist mortgage advisers that can get you both AIP and mortgage based on his hourly/daily rate with 3 months personal and business bank account statements and copy of contracts for the past 2 years - all of these he should have at hand without the need to go to the accountant. PM me for details if you want.

Also if his income is from single source he can just calculate his salary + dividends income and do the self assessment tax return on his own in 30min and get the SA302 immediately (not recommended if he doesn't feel comfortable doing that) saving a couple of £100s in accountancy fees for a simple job.

SA302 can be downloaded from the Government portal in minutes for all years with submitted tax return. I assume the accountant hasn't submitted the tax return for the last year as the deadline is 09.2018 for paper and 01.2019 online. In this case ask if it's acceptable to provide the SA302 for previous years.

In all cases speak to a mortgage broker who understands how self employment works, believe me the better offers you will get are going to wipe out the "Friends and family" discount you are getting now.

Ruthzoo

Thanks Sal, this is very useful. One issue is that the company is only just over a year old, so only one year of accounts as opposed to two. Will this be an issue and is it even possible to get a mortgage with the company being less than 2 years old? Worth noting that the mortgage will be in both our names and I am in full time permanent employment so mortgage is not solely relying on him.

sal_III

Ruthzoo wrote: »

Thanks Sal, this is very useful. One issue is that the company is only just over a year old, so only one year of accounts as opposed to two. Will this be an issue and is it even possible to get a mortgage with the company being less than 2 years old? Worth noting that the mortgage will be in both our names and I am in full time permanent employment so mortgage is not solely relying on him.

There might be Lenders who would lend with 1 year of accounts and 6+ months left on the current contract. Speak with a MB who is adept at working with contractors for details. Most of them will give you free advice even if they charge a fee for the actual application and often can secure you much better rate than you can get yourself or through non-specialist MB which more than pays off the fee (£500 in my case).

Thrugelmir

Ruthzoo wrote: »

Thanks very much for your reply. I know, I don't understand why they are saying 3 weeks, they are being pretty unhelpful and I think its just a nuisance to them!

Your property isn't even on the market yet. That's a far bigger issue.

Ruthzoo

This isn't an issue at all. Our offer was accepted with the terms that it was subject to sale. We have a colony property in Edinburgh city centre, properties in our area sell within a week. Please only comment if it's going to be helpful to the question I've actually asked.

csgohan4

Ruthzoo wrote: »

This isn't an issue at all. Our offer was accepted with the terms that it was subject to sale. We have a colony property in Edinburgh city centre, properties in our area sell within a week. Please only comment if it's going to be helpful to the question I've actually asked.

Here's something helpful, get another broker and don't mix money and friends/family as evident as your inexperience broker who you are still using despite time scales being tight.


You really do need at least 1 years accounts, preferably 2 years to stand a chance of a mortgage. I hope your credit history if ok


From your comments, you offer isn't accepted yet then as you haven't got an offer yet. Someone else could still offer and get the property if their ready to go, which you are not