Can I get a mortgage if I am self-employed with only 1-year’s accounts?

When applying for a mortgage, most lenders want to see your business accounts for the last two or three years.

Does that mean you unable to buy your dream home until you have been trading for over three years then? Well, it depends.

Very often we come across clients who were employed by a company for several years and then their employer suggested that they change to being self-employed. They still work with the same company and do the same type of work, but now they work as a contractor. This happens often if you work in IT, but other industries use this model too. 

If you are in this situation and you only have 1-year accounts available, then you don’t need to give up the dream of buying a home. You will have a limited choice of mortgage products and lenders who you can approach, but should be able to get a mortgage. 

There are lenders who will accept your mortgage application if you set up a completely new business recently and only have one year’s accounts. These lenders typically limit the amount of money you can borrow which means you will need to put down a bigger deposit (typically 20% - 25%). Also, some of these lenders are “specialist lenders” and their mortgage products are more expensive than those available through the high street lenders.

So, should you wait until you have been trading for another year or two? Or should you go ahead and buy your home as soon as possible? There is no right or wrong answer. It will depend on your personal circumstances and your needs. Whatever your situation – we can help you answer all these important questions and help you make the right decision, so please get in touch.