How to Get a Mortgage with Just One Year of Limited Company Accounts
Securing a mortgage can be a bit tricky if you’re self-employed and only have one year of company accounts. Lenders usually want to see at least two to three years of financial history to feel confident about your income stability. But don't worry – it’s definitely possible to get a mortgage with just one year of accounts. Here's how you can improve your chances.
What Lenders Look For:
Why They Prefer More Years of Accounts
Lenders like to see a stable income history because it helps them feel secure that you’ll be able to make your mortgage payments. More years of financial data mean they can better assess how consistent your income is.
Key Criteria for Self-Employed Applicants
Even with just one year of accounts, some lenders might consider your application. They’ll typically look at:
Your business’s net profit.
Your salary and dividends, if you’re a company director.
The overall financial health of your business and its future prospects.
Getting Your Application Ready
Gather Strong Financial Documents
Make sure your financial records for the year are complete and accurate. You might need:
Full year’s accounts prepared by an accountant.
Recent bank statements.
Proof of future income, like contracts or ongoing work agreements.
Strengthen Your Personal Financial Profile
A strong personal financial profile can help balance out your limited business history:
Credit Score: Make sure your credit score is good by paying off debts and clearing any credit issues.
Deposit: Save up a substantial deposit. A larger deposit can make you a more attractive borrower.
Reduce Debt: Lowering your personal debt can improve your debt-to-income ratio.
Work with a Mortgage Broker
A mortgage broker who understands self-employed mortgages can be really helpful. They can:
Connect you with a wider range of lenders.
Negotiate better terms for you.
Help you present your financial situation effectively.
Showcasing Your Business's Potential
Demonstrate Future Earnings
If your business has signed contracts or predictable future income, show this to the lender. It proves that your income is stable.
Provide a Solid Business Plan
A strong business plan can reassure lenders about your business’s stability and growth potential. Include:
Market analysis.
Revenue projections.
Growth strategies.
Look for Specialist Lenders
Niche Lenders
Some lenders specialize in self-employed mortgages and may be more flexible with their requirements. They understand the unique challenges you face and are more willing to work with limited financial history.
While getting a mortgage with just one year of accounts can be challenging, it’s definitely doable with the right help. By preparing thoroughly, improving your personal financial profile, demonstrating your business’s potential you can significantly improve your chances.
If you have more questions or need personalized help, don’t hesitate to reach out. Our team of experienced mortgage brokers specializes in helping self-employed individuals navigate the mortgage process and achieve their homeownership dreams. We’re here to help!
YOUR HOME IS AT RISK IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR OTHER LOAN SECURED ON IT
