Sole traders.
For a sole trader, lenders commonly look at evidence of trading income and tax records. How many years they need and how they calculate an acceptable figure can vary.
Self-employed
mortgages.
Understand how lenders assess self-employed income and which financial records may support a mortgage application.
Prepare my income details
How lenders assess
self-employed income.
Lenders can assess income differently. The right starting point is a clear account of how yours works.
Limited company directors.
Salary, dividends, company accounts and sometimes retained profit may be relevant, depending on the lender’s approach. Ownership share and business history can also matter.
Contractors and mixed income.
Contracts, day rates, renewal history and gaps between work may all be part of the picture. Income from more than one source needs to be explained clearly.
Documents for a
self-employed mortgage.
What you need depends on your situation and the lender. These are useful things to start bringing together.
Create my mortgage checklist- Recent accounts and tax calculations
- Tax year overviews where requested
- Business and personal bank statements
- Contracts or evidence of ongoing work
- A picture of regular commitments
- A clear explanation of any changes
Self-employed mortgage
questions.
Variable income, a new business structure or a recent change of direction can need a more careful conversation. There is no guaranteed answer before the details are assessed.
Do I need a long trading history?
Requirements differ between lenders. The length of time you have traded, continuity of work and evidence of income can all affect the available options. Avoid assuming either that a short history rules you out or that it will be accepted.
Will lenders use my latest year or an average?
Approaches vary. Some may average income across a period; others may take a different view, especially when income is changing. The supporting documents and full circumstances matter.
Can company money count as my income?
That depends on the lender’s criteria, your ownership and the company’s circumstances. Do not assume retained profit or turnover is treated as personal income. Your accountant can help explain the financial records.