Self-Employed Mortgages, including applicants with one year's accounts
Can you get a mortgage with only one year's self-employed income?
Yes! While many people believe they need two or three years of accounts, several lenders will consider self-employed mortgage applications with just one year's trading history.
At DLi Mortgages, we specialise in helping self-employed applicants secure mortgages across Poole, Bournemouth and across the UK.
Dave Tindall, CeMAP
Mortgage & Protection Adviser
Chantelle Tindall-Langan
Client Support & Administration
Self-employed mortgage advice for:
Sole traders
Helping sole traders secure mortgage solutions tailored to their business income.
Partnership owners
Expert advice for partnership businesses with complex income structures.
Limited company directors
Access lenders who understand salary, dividends and retained profits.
New businesses
Mortgage options available for business owners with as little as one year's trading history.
Freelancers
Flexible mortgage options for freelancers across a wide range of industries.
Can I get a mortgage with one year's accounts?
Many lenders require two years of trading history, but there are some who will consider applications from self-employed individuals who have only been trading for one year.
Approval will depend on a variety of factors such as:
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Income level
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Industry experience
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Deposit size
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Credit history
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Existing financial commitments
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Business performance
If you've recently become self-employed after working in a similar industry, some lenders may view your previous employment history positively.
Mortgages for limited company directors
Limited company directors often face additional challenges because lenders assess income differently. Dependent on lender, if you hold more than 20% or 25% of the shares in your limited company, you will be classed as self-employed, even if you are paid a regular salary.
Some lenders use:
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Salary and dividends
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Salary plus retained profits
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Net profit calculations
Understanding which lenders use which approach can significantly impact borrowing potential.
Recent self-employed mortgage success stories
Every self-employed mortgage application is different. Here are some examples of recent clients we've helped secure mortgage offers.
Limited company director with less than two years as a Ltd company
A recent client had established their limited company less than two years before finding their dream home and applying for a mortgage. Like many company directors, they were taking a relatively small salary and leaving profits within the business.
Several lenders would only assess income using salary and dividends, an would not assess the client's previous partnership income, significantly restricting their borrowing potential.
By identifying a lender willing to assess the director's salary alongside their share of net profit, and also factoring in the last year's partnership accounts, we were able to substantially increase the amount available to borrow and secure a mortgage so the client could buy his dream family home.
If you're a limited company director, the way a lender assesses your income can make a significant difference to your mortgage options.
One year self-employed with no previous industry history
Many people assume they need several years of accounts before they can obtain a mortgage, particularly if they have recently started a business in a completely new industry.
We recently helped a client who had been self-employed for just one year and had no documented employment history within the same sector before starting their business.
Despite the additional complexity, we identified a lender comfortable with their circumstances and successfully secured a mortgage offer based on the income from their first year of trading.
This demonstrates that obtaining a mortgage with only one year's self-employment can be possible, even where there is limited previous industry experience.
Self-employed applicant using most recent year's income
A self-employed business owner approached us worried that they couldn't buy the home they wanted. Due to a divorce, she had grown her business in the most recent trading year, but was worried her potential borrowing would be reduced because her previous years' income was lower.
Many lenders average income over multiple years, which can disadvantage growing businesses.
We sourced a lender prepared to assess affordability using the applicant's most recent year's net profit, allowing her to maximise her borrowing potential and proceed with their property purchase.
For self-employed applicants whose income has increased significantly in recent years, lender selection can have a major impact on mortgage affordability.
Frequently asked self-employed mortgage questions
How much can I borrow?
Most lenders assess affordability based on documented income, expenditure and existing commitments. The amount available varies depending on your circumstances. Typically you may have heard that you can borrow 4.5x your income, but the true calculation is far more nuanced.
Do I need two years of accounts?
Not necessarily. Some lenders will consider applications with one year's accounts.
What documents will I need?
Typical document requirements may include:
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SA302s
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Tax Year Overviews
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Company accounts
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Business bank statements
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Personal bank statements
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Identification documents
Why Choose DLi Mortgages?
Self-employed mortgage applications often require a deeper understanding of lender criteria than standard employed applications. We work with a broad range of lenders and regularly help business owners, directors, contractors and sole traders secure mortgage offers.
If you're self-employed and want to explore your mortgage options, contact DLi Mortgages for a no-obligation initial consultation.
Get in touch
We'd love to help. The world of mortgages and protection is complex, and it's important to get things right. We are happy to arrange a no-obligation call so that we can get to know each other, please just get in touch.
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