If you're a <a href="https:\/\/www.onlinemortgageadvisor.co.uk\/self-employed-mortgages\/">self-employed professional looking to get a mortgage<\/a>, you may have heard that most lenders will ask you to evidence your income with at least two-to-three years' worth of accounts. But what can you do if you haven't been trading for that long, or can only prove your income from the last 12 months or so? Luckily, there could be options available, and in this guide, we'll outline them for you and tell you where you can turn for the right advice. The following topics are covered below...\r\n<ul>\r\n \t<li><a href="#can-you">Can you get a mortgage with one year's accounts?<\/a><\/li>\r\n \t<li><a href="#how-long">How long do I need to have been self-employed for to get a mortgage?<\/a><\/li>\r\n \t<li><a href="#what-if">What if you haven't finished your first year of trading?<\/a><\/li>\r\n \t<li><a href="#Occupations">Occupations which are acceptable<\/a><\/li>\r\n \t<li><a href="#why-harder">Why is it harder to get a mortgage when you've only been self-employed for a short time?<\/a><\/li>\r\n \t<li><a href="#most-borrow">What is the most you can borrow if you've been self-employed for a year?<\/a><\/li>\r\n \t<li><a href="#prove-income">How do I prove my income?<\/a><\/li>\r\n \t<li><a href="#calculate-income">What figure is used to calculate my income?<\/a><\/li>\r\n \t<li><a href="#remortgage">Remortgaging with one year's accounts<\/a><\/li>\r\n \t<li><a href="#faqs">FAQs<\/a><\/li>\r\n \t<li><a href="#speak-to-expert">Speak to an expert<\/a><\/li>\r\n<\/ul>\r\n[feefo-banner]\r\n<h2 id="can-you">Can you get a mortgage with one year's accounts?<\/h2>\r\nYes. Like many of the people that enquiry with us, you might be reading this because you've been either refused a mortgage for not having enough trading history or you're thinking of applying but aren't sure what a mortgage lender will ask for. Either way, it's true to say that obtaining a mortgage with less than two years accounts can be very tricky.\r\n\r\n<strong>But the good news is that it IS possible,<\/strong> if you know where to turn for the right advice. This is where we come in. We run a free broker-matching service that will pair you up with a mortgage advisor whose speciality is finding lenders for self-employed customers with just one year of trading under their belts.\r\n\r\nThe following applicants CAN get a mortgage<em> (accurate as of March 2020 & subject to status)<\/em>: [checklist]\r\n<ul>\r\n \t<li>Limited company directors only trading for just 9 - 12 months. See our guide to <a href="https:\/\/www.onlinemortgageadvisor.co.uk\/self-employed-mortgages\/mortgages-for-directors\/">limited company director mortgages<\/a> for more information<\/li>\r\n \t<li><a href="https:\/\/www.onlinemortgageadvisor.co.uk\/self-employed-mortgages\/mortgages-for-sole-traders-and-partnerships\/">Mortgages for sole traders<\/a> only trading for just 9 - 12 months<\/li>\r\n \t<li>Established businesses recently limited \/ changed trading style<\/li>\r\n \t<li><a href="https:\/\/www.onlinemortgageadvisor.co.uk\/income-types\/contractor-mortgages\/">Contractors<\/a> working for less than 12 months<\/li>\r\n \t<li>9 - 12 months self-employed with bad credit<\/li>\r\n \t<li>No income necessary for buy-to-let<\/li>\r\n \t<li>Up to 95% mortgages with <a href="https:\/\/www.onlinemortgageadvisor.co.uk\/help-to-buy-mortgages\/">Help to Buy<\/a><\/li>\r\n<\/ul>\r\n[\/checklist]\r\n<h2 id="how-long">How long do I need to have been self-employed for to get a mortgage?<\/h2>\r\nMany lenders currently ask for three years' accounts to prove income on a mortgage application. There are a few that may consider <a href="https:\/\/www.onlinemortgageadvisor.co.uk\/self-employed-mortgages\/self-employed-mortgages-with-2-years-accounts\/">mortgages for those who have been self-employed for less than two years<\/a>, and there are even a small number of mortgage lenders accepting one year's accounts.\r\n\r\nThere are even a handful of options when you have only been trading for nine months - so long as you have accounts from a qualified accountant drawn up year to date, the lenders can consider offering the mortgage before the full first year is complete.\r\n<h2 id="what-if">What if you haven't finished your first year of trading?<\/h2>\r\nIf you haven\u2019t completed a tax return for your first year then it's unlikely you'll be considered by most lenders. That said, thankfully, there are a couple of specialist lenders that can consider you for a mortgage before you've completed your first year trading.\r\n\r\nHistorically, mortgages without one year's books just didn't exist because the lender has to evidence that they have lent responsibly, and they are required to base their lending decision on tangible proof that shows you can, without doubt, afford to repay what you are borrowing.\r\n\r\nIf you don't have an official record of the tax you've paid, even if you have had a cracking first six months and earned way more than you need, it's not acceptable.\r\n\r\n<strong>However<\/strong> - If you are near to the end of your first trading year, at say 9-10 months, then it may still be worth making an <a href="https:\/\/www.onlinemortgageadvisor.co.uk\/mortgage-application\/">initial application<\/a> to get the <a href="https:\/\/www.onlinemortgageadvisor.co.uk\/mortgage-application\/mortgage-decisions-in-principle\/">mortgage approved in principle<\/a>.\r\n<ul>\r\n \t<li>There are lenders who are happy to offer the mortgage now, based on the figures you have,<\/li>\r\n \t<li>And others that require a full year's trading but would be happy to approve the initial agreement, subject to you waiting until your year is up before making the full applications.<\/li>\r\n<\/ul>\r\nAs these decisions tend to last for three months, this will ensure that you know you can get a mortgage you're happy with well in advance of putting an offer in on a property. The figure your mortgage advisor would use on this initial application would be whatever you anticipate earning as a net profit\/salary and dividends because, at this stage, it is not necessary to be 100% accurate.\r\n\r\nSo, if you think you\u2019ll earn 20k, then they\u2019d key this into the system to generate a decision based on your accounts showing this figure when they are eventually complete. The credit score decision should really be the same regardless (so long as your income is not too different than your estimation) \u2013 giving you a pretty accurate result.\r\n<h2 id="Occupations">Occupations which are acceptable<\/h2>\r\nGenerally, mortgage lenders who specialise in self-employed customers are pretty flexible when it comes to the sector in which you work. As a result, almost all occupations would be acceptable provided the business is viable, trading as a going concern and income is sustainable.\r\n\r\nThis may include taxi drivers, builders, plumbers, painter and decorators, electricians and other tradesmen, musicians, landlords, those in the financial sector, retailers, those with online businesses, professionals, investors and more.\r\n<h2 id="why-harder">Why is it harder to get a mortgage when you've only been self-employed for a short time?<\/h2>\r\nBecause self-employed mortgages are typically harder to obtain since the lender may have difficulty establishing how much you earn, and therefore the risk of you being unable to repay what you borrow.\r\n\r\nGenerally, if you have been self-employed for longer than three years, you would be considered by most lenders in the same way as an employed applicant. If you've only been trading for one or two years then it is often more difficult and lenders may deem you to be more of a risk.\r\n\r\nGone are the days of pure self-cert mortgages, where self-employed borrowers could tell a bank what they were earning without proof, and borrow pretty much what they wanted.\r\n\r\nSince the recession, lenders have been forced to tighten their approach and request proof in almost all regulated borrowing applications. This has impacted the self-employed market massively, and many business owners and tradesmen now find themselves struggling to find finance. With the number of start-up businesses continuing to rise, we are finding more and more customers that have recently gone self-employed looking for finance and finding it difficult without the help of a specialist broker.\r\n<h2 id="most-borrow">What is the most you can borrow if you've been self-employed for a year?<\/h2>\r\nTypically, self-employed applicants can borrow pretty much the same as employed applicants (depending on credit score), which is usually maxed out at 4.5x their income. In certain circumstances, those earning a higher wage are able to 'stretch' this to a higher level if they can prove affordability.\r\n\r\nVery occasionally, it\u2019s possible to ask a lender to consider an income projection based on accounts that are to be drawn up before the year has ended. For instance, if you've been trading for say 20 months, you should have one year's full accounts plus nine months of the second year (depending on your tax year-end).\r\n\r\nIf the most recent year\u2019s first eight months are on track to show a much higher annual income, and you're looking to borrow more than 4.5x the previous year's earnings - then, depending on the strength of the rest of the application, a <a href="https:\/\/www.onlinemortgageadvisor.co.uk\/mortgage-application\/mortgage-underwriting\/">mortgage underwriter<\/a> may consider using a qualified accountant's projection and lend based on the anticipated income for the unfinished year.\r\n\r\nFor example...\r\n\r\n<em>Net profit Dec 2018- Dec 2019 = 22,000 <\/em> <em>Net profit Dec 2019 \u2013 Aug 2020 = 25,000 <\/em> An accountant (depending on viability) may calculate that trading is likely to continue in line with the previous nine months. Therefore 25k \/ 9 months = \u00a32.77kpm. \u00a32.77kpm spread over 12 months would be approx \u00a333.3k for the year.\r\n\r\nA lender considering the 33.3k lending at 4.5x income would equal approx. a \u00a3150k mortgage, whereas if they only accepted the finalised accounts the max would be much less.\r\n\r\n<em>It is important to note that it isn\u2019t always this straightforward and there is usually a lot more work involved getting to a decision, but it is possible to get a mortgage based on one year's accounts if you apply through the right broker.<\/em>\r\n<h2 id="prove-income">What income evidence is needed?<\/h2>\r\nAny mortgage lender that will accept one year's accounts may require a different form of income proof, but will likely need you to evidence the income through a qualified accountant reference, finalised accounts, or a self-assessment tax return (SA302). You would still be subject to the same income multiplier rules as any other applicant (generally a maximum of 4.5x income).\r\n<h2 id="calculate-income">Which figure is used to calculate my income?<\/h2>\r\nWhether you have one year or 10 years' accounts, the figure used is the same. For those looking for a sole trader mortgage or working in a partnership, the figure is either your share of the net profit when using accounts, or the \u2018total income received\u2019 on a self-assessment tax return (SA302\u2019s).\r\n\r\nWith mortgages for limited company directors, it is the directors\u2019 salary and dividend received as stated on the accounts or reference.\r\n<h2 id="remortgage">Remortgaging with one year's accounts<\/h2>\r\nThis is possible and remortgaging comes with the same stipulation as for main purchase mortgages - you need to have been trading and have one year's books signed off by an accountant (Ltd companies) or submitted to HMRC (self-assessment).\r\n\r\nApplying for your remortgage through a broker who specialises in self-employed customers with limited accounts can boost your chances of finding the best available deal.\r\n<h2 id="faqs">FAQs<\/h2>\r\nHave a question about getting a mortgage with less than two years' accounts that we haven't covered above? Take a look through or FAQ section to see whether it has the answer you need.\r\n<h3>Can I get a one-year self-employed mortgage with bad credit?<\/h3>\r\nYes, <a href="\/bad-credit-mortgages\/how-to-get-a-mortgage-with-bad-credit\/">bad credit mortgage lenders<\/a> that consider applicants with one year's books and credit issues do exist, but with some restrictions. Currently, you would be required to have at least 15% deposit (15% equity if you want to <a href="https:\/\/www.onlinemortgageadvisor.co.uk\/bad-credit-mortgages\/mortgage-with-defaults\/">remortgage with bad credit<\/a>), and no defaults, <a href="https:\/\/www.onlinemortgageadvisor.co.uk\/bad-credit-mortgages\/mortgages-and-ccjs\/">CCJ\u2019s<\/a>, mortgage arrears in the last 2 years.\r\n\r\nIf you had missed \/late payments on credit in the last 12 months you still may be considered, and often any issues with mobile phone companies are ignored.\r\n<h3 id="speak-to-expert">Can I get a Help to buy mortgage with only one year's accounts?<\/h3>\r\nYes. If you have one year's accounts you CAN get <a href="https:\/\/www.onlinemortgageadvisor.co.uk\/help-to-buy-mortgages\/">Help to Buy scheme <\/a>assistance and buy with just a 5% deposit (subject to credit score and usual criteria). There are very few lenders considering self-employed Help to Buy mortgages, but they do exist and often have very attractive rates.\r\n<h2>Speak to a mortgage broker who specialises in self-employed customers<\/h2>\r\nIf you\u2019re having trouble finding a mortgage lender that accepts one year's accounts \u2013 let us know! We work with experts that can help you today!\r\n\r\nThrough our free broker-matching service, we will pair you up with a mortgage advisor who has the right expertise for your needs and circumstances. Call us on 0808 189 2301 or <a href="https:\/\/enquiries.onlinemortgageadvisor.co.uk\/match-me-with-a-self-employed-specialist\/">make an enquiry<\/a> to get started.\r\n\r\nRemember, speaking to the right mortgage broker could help you save time, money and potential disappointment in the long run, and our no-obligation service will make sure you find the advisor who's the best fit for you.