PLANNING FOR A MORTGAGE WHEN YOU’RE SELF EMPLOYED
Securing a mortgage can be a difficult task at the best of times. Pair that with being self employed and the whole process could turn into a bit of a nightmare, unless you’re well prepared of course!
Your Tax Shop help their clients on a regular basis by providing them with an accountant’s reference which most lenders will require when you’re self-employed.
This usually provides the lenders with the last two-or-three years financial data, based upon the income you’ve received from your business; usually a mixture of salary and dividends if you operate as a limited company or the profits from your self-employment if you’re a sole-trader.
Your Tax Calculation
Most lenders will accept your Tax Calculation as proof of your earnings.
The GOV.uk website states that lenders will accept one of the following:
- – A copy of the tax calculation (otherwise known as an SA302) which can be printed from your HMRC online account
- – A tax calculation printed from commercial software often used by accountants to submit tax returns
Lenders may also require a tax year overview from you. This can also be printed from your HMRC online account or from the software used by your accountant.
To avoid unnecessary delays in the mortgage application process, it’s important to check what documents and evidence a lender will require before you go ahead and apply for a mortgage, or hand over any fees.
The lenders who make life easier!
Your Tax Shop’s top tips to make the mortgage application run smoothly
The main key is preparation!
Before you find your dream house, do make sure that you get yourself prepared and ready for the mortgage application process, by following our top tips…
- – Get your books up to date and have all your tax-related documentation to hand
- – Go back and dig out all your tax figures for the last three years. You will need at least that to satisfy most lenders, although some may accept two.
- – If you haven’t had your own business for three years, and was employed prior to setting up on your own, you will need your P60’s or P45’s to cover this time period. Dig through your paperwork and make sure you have these to hand!
- – If you have an accountant, make contact with them. They will most likely be able to guide you through the process and explain the requirements in detail, as well as completing an accountant’s reference, if required.
- – If you don’t have an accountant, then make sure you find a lender that will accept your tax calculations as proof of earnings. Otherwise, you’ll find yourself in a sticky situation where you’ll need an accountant to verify your earnings just for the mortgage application process!
Your Tax Shop hopes the above information helps to provide you with some clarity on what will be required from you when you decide to take the jump onto the property ladder or move properties. If you would like any further details, or need some help in getting your information together, get in touch with us today and allow us to help make the application process smooth sailing from here! Contact us on 0161 339 5689 or book an appointment.