Mortgages for self-employed – sole trader

When compared to Limited Companies, assessing the income of a Sole Trader is less complex. Here at Aspire we have helped many sole traders with their mortgages and are experienced in finding the most suitable lender to suit your unique circumstances.

In an ideal world you will already have 2 years’ accounts or tax calculations and overviews to show your income with most lenders preferring you to have been trading for 2 years or more. Some lenders, however, will consider lending to sole traders with less than 2 years’ trading.

Lenders’ requirements will vary and they will have several different methods of assessing a sole trader:

• Average of 2- or 3-years’ SA302 (tax calculations)
• Average of 2- or 3-years’ accounts plus SA302 tax calculations
• Latest year’s SA302 tax calculations.

They may also ask for an accountant’s reference, accountant’s projection or an explanation of anything unusual such as sudden growth, or if a previous year’s loss has occurred.

We will examine your trading figures closely to identify the most appropriate lender to match your circumstances, giving you the best chance of obtaining the mortgage loan.

It is often the case that lenders will ask for 2-3 years completed accounts as well. They will also require your accountants’ details and frequently ask for their level of qualification. Depending on the growth of your business, they may take an average of 2 years or perhaps just the latest year, but if turnover has decreased, they will most definitely use the latest years figures. If you have made a loss in the most recent year, there is a strong chance your application will be declined.

What next?

If, as a self-employed person, you find the process too intimidating or are simply too busy to look into all the various requirements yourself, contact me at Aspire Financial Services for friendly advice by booking a free 30-minute introductory call.


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