Mortgage advice that takes account of how you earn
Being self-employed does not automatically prevent you from obtaining a mortgage. The challenge is often that income can be structured or evidenced in several different ways, while lenders do not all assess those circumstances identically.
TLA Finance can review how you trade, how long the business has operated, how you draw income and which documents are available. We will explain the mortgage routes relevant to your circumstances and help you prepare an accurate application.
We assist sole traders, partners, limited-company directors, contractors and applicants with more than one source of income from our office in Amersham, serving clients across Buckinghamshire, London, the Home Counties and the wider UK.
SELF-EMPLOYED
Different ways self-employed income may be assessed
The information required will depend on how the business is structured and how income is received. A mortgage adviser should understand the full picture before researching options.
Sole traders
For a sole trader, lenders will commonly consider declared trading income and the supporting tax evidence. Accounts, tax calculations, tax-year overviews and business bank statements may all help demonstrate the position. The precise documents and period required vary, so we will identify what is relevant before an application is made.
Limited-company directors
A company director may receive salary, dividends or a combination of the two. Some lenders may also consider other aspects of the company’s financial position in appropriate circumstances, subject to their criteria and underwriting. We will review the accounts and income structure rather than assuming that one calculation applies to every director.
Partnerships and LLP members
Partners may need to evidence their share of profits and provide partnership accounts, tax documents and other supporting information. The ownership arrangement, length of trading and consistency of income can all be relevant.
Contractors and professionals
Contractors may be assessed using accounts or other evidence depending on their working arrangement. Contracts, day rates, employment history, gaps between contracts and the way income is paid may be considered. We will establish the facts accurately before discussing possible routes.
self-employed
What if the latest year is different from earlier years?
Business income does not always move in a straight line. A recent year may be stronger or weaker because of investment, one-off costs, changes in contracts, maternity or parental leave, illness, economic conditions or a planned change in the business.
Where figures fluctuate, lenders may take different approaches. Some may average income, while others may focus on the latest period or seek an explanation and further evidence. A recent increase is not automatically accepted, and a reduction may require additional consideration.
We will review the trend, identify the documents that support it and explain where further evidence may be needed. The objective is to present the position accurately, not to force the figures into a lender’s criteria or create unrealistic expectations.
Documents that may be required
It is helpful to begin collecting evidence early. Depending on your circumstances, this may include:
Finalised business or company accounts.
HMRC tax calculations and tax-year overviews.
Personal and business bank statements.
Payslips and dividend vouchers for company directors.
Current and previous contracts for contractors.
Proof of deposit and the source of those funds.
Identification and address evidence.
Details of loans, credit commitments and regular expenditure.
Evidence of any other income being included in the application.
This is not a universal checklist. We will confirm which documents are relevant to your circumstances and the proposed lender before submission.
self-employed
Can retained profits or company performance help?
Some company directors retain profit within the business rather than withdrawing all available income. In certain circumstances, particular lenders may consider company information beyond salary and dividends, subject to their individual criteria and a sustainable overall assessment.
That does not mean retained profit will always be accepted as personal income. The lender may examine ownership, business performance, commitments, cash position and whether the proposed income is sustainable. An accountant’s involvement or additional evidence may also be required.
We will not assume that retained profit can be used. We will first review the accounts, your shareholding and the amount required, then explain whether there may be a suitable route to investigate.
Buying, moving or remortgaging
Self-employed mortgage advice may be needed at several stages:
Buying your first home
We can explain how your deposit, income evidence, commitments and credit history may affect affordability and help you prepare for the application process.
moving home
Your existing mortgage, equity, sale and purchase timetable and current business figures may all influence the next step. We will review the transaction as a whole.
Remortgaging
If an existing deal is approaching its end, start the review early. We can consider the options available through our service alongside any appropriate product-transfer route from the current lender, taking account of costs and objectives..
Raising additional capital
Additional borrowing may be considered for purposes such as home improvements or other permitted needs, subject to affordability, lender criteria and the purpose of the funds. Increasing borrowing secured against your home should be considered carefully
How TLA Finance will handle your enquiry
1. Understand your business and objectives
We begin with your proposed transaction, deposit or equity, income structure, business history, commitments and timescale.
2. Review the available evidence
We identify the accounts, tax documents, statements, contracts and other information needed to assess the position properly.
3. Research relevant mortgage options
We explain the mortgage offer and remain available as the transaction progresses towards completion. We can also discuss future reviews where appropriate.
4. Make a recommendation
If a suitable recommendation can be made, we explain why it is appropriate and what evidence and conditions are likely to apply.
5. Submit and progress the application
With your agreement, we submit the application and support its progress through underwriting, valuation and mortgage offer.
Frequently Asked Questions
How long do I need to have been self-employed?
There is no single period that applies to every lender or applicant. The length of trading, available evidence, occupation, previous experience and overall circumstances may be relevant. We will review the facts before discussing possible routes.
Can I obtain a mortgage with only one year of accounts?
Options may exist in some circumstances, but availability depends on lender criteria, the evidence available and the strength of the overall application. One year of accounts does not guarantee acceptance.
Are company directors treated as employed or self-employed?
That depends on the lender’s approach and the applicant’s ownership and income structure. A director may receive PAYE salary while also being assessed using dividends, company accounts or other permitted evidence.
Can a lender use my latest year’s income?
Some lenders may give particular weight to the latest year, while others may average a period or investigate a change in income. The appropriate approach depends on the figures, trend and lender criteria.
Can retained profits be used for mortgage affordability?
Certain lenders may consider aspects of company performance in appropriate cases, but retained profits are not automatically treated as personal income. Ownership, sustainability, commitments and detailed accounts may need to be assessed.
Will my accountant need to provide information?
An accountant’s certificate or clarification may sometimes be requested. The exact requirement depends on the lender and the evidence already available. We will tell you if additional accountant input is likely to be needed.
Can you guarantee that my mortgage will be approved?
No. Mortgage availability is subject to lender criteria, affordability, credit checks, valuation, underwriting and the accuracy of the information supplied. We will explain the position honestly and will not create false expectations.
Contact us
Getting expert mortgage, protection or insurance advice is just a call or email away.
Request a self-employed mortgage call-back
If you are self-employed or a company director and would like your position reviewed, provide a few details and a member of the TLA Finance team will contact you to discuss the enquiry.
