Self-Employed Mortgage Advice
Self-employed mortgage advice from a family-run specialist broker. We have been helping sole traders and limited company directors secure mortgages for over 20 years, across Lancashire, Greater Manchester and nationwide.
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How lenders assess income - limited company directors
How Do Lenders Assess Limited Company Director Income?
This is where the variation between lenders is greatest. The main approaches are:
• Salary + dividends: the most common method, used by the majority of high street lenders
• Salary + net profit: used by some lenders and often more favourable for directors who retain profit in the business
The right approach depends on how your business is structured and how you draw your income. We'll look at your figures and recommend the lender whose assessment method gives you the best outcome.
What Documents Will You Need?
For limited company directors, you'll typically need:
Tax calculations for the last 2 years (or 1 year where applicable)
Tax year overviews from HMRC to support the Tax Calculations
Company accounts for the last 2 years, prepared by an accountant
3 months of business and personal bank statements
Proof of ID and address
We'll go through exactly what's needed for your specific application before you start, so there are no surprises and you can gather everything in one go.
If you work through a limited company but on a contract basis, you may fall under our contractor mortgage advice instead — lenders treat contract income differently to employed or director income, and the distinction matters. Not sure which applies to you? Speak to one of our advisers and we will tell you which route gives you the best outcome. We also advise on the full range of mortgage options including remortgages and buy-to-let.
How lenders assess income - sole traders
How Do Lenders Assess Sole Trader Income?
Most lenders will look at your net profit as shown on your SA302 tax calculations and corresponding tax year overviews from HMRC. They typically want to see two years of accounts, though some lenders will consider one year.
If your income has been growing, some lenders will use the most recent year's figure, others will average the two. We know which approach works best for your numbers.
What Documents Will You Need?
For sole traders, you'll typically need:
Tax calculations for the last 2 years (or 1 year where applicable)
Tax year overviews from HMRC to support the Tax Calculations
3 months of business and personal bank statements
Proof of ID and address
We'll go through exactly what's needed for your specific application before you start, so there are no surprises and you can gather everything in one go.
Trading period
How Long Do You Need to Have Been Self-Employed?
The standard requirement across most lenders is two years of accounts or SA302s. With two years of records behind you, your options are wide open.
If you've been self-employed for less than two years, you're not necessarily stuck. A growing number of lenders will consider applications with just one year of accounts, particularly where:
• Your most recent year's income is strong
• You have a solid employment history in the same field before going self-employed
• Your accountant can provide supporting evidence of business performance
Our preference is always to find you the best deal from the widest possible range of lenders. If you have two years' accounts, you'll have the most options. If you only have one year, we'll be straight with you about what's available and find the best of those options for you.
Common concerns
1. "My accountant keeps my profits low to reduce my tax bill - will that count against me?"
It can do with some lenders. That's why it matters which lender you approach. Some will look at net profit, others at salary and dividends. We'll find the one whose method works for your figures.
2. "I've only been self-employed for one year - is there any point applying?"
Yes, in the right circumstances. One year of strong, evidenced income with a good employment history before going self-employed can be enough for some lenders. We'll tell you honestly what's realistic.
3. "My income varies year to year - will that put lenders off?"
Not necessarily. Some lenders average the last two years, others use the most recent year. If your income is growing, we'll find lenders who will use your latest figures to your advantage.
4. "I'm a director but I don't take a big salary - most of my income is in dividends"
Very common. Most lenders will assess salary plus dividends, and many are well set up for this. We'll confirm the right lender and make sure all your dividend income is presented correctly.
5. "Will I need a bigger deposit if I'm self-employed?"
Not as a rule. The deposit requirements for self-employed applicants are generally the same as for employed applicants. The difference is in how income is evidenced, not in how much you need upfront.
Frequently Asked Questions
Can I get a mortgage if I'm self-employed?
Yes. Being self-employed doesn't prevent you from getting a mortgage, it just means your income needs to be evidenced differently. With the right broker and the right lender, self-employed applicants can access the same rates and deals as anyone else.
How many years of accounts do I need?
Most lenders require two years of accounts or SA302 tax calculations. Some will consider one year, particularly where income is strong and consistent. We'll be honest with you about what's achievable based on your records.
I'm a limited company director — how will my income be assessed?
Most lenders will use your salary and dividends. Some will also consider net profit in the company, which can increase what you're able to borrow. We'll identify the lender whose assessment method works best for your income structure.
What if my income has gone up significantly recently?
Some lenders will use your most recent year's income rather than averaging. If your income has grown, we'll find lenders who will use that to your advantage rather than averaging it down.
Will I pay a higher rate because I'm self-employed?
Not necessarily. Self-employed applicants can access the same products and rates as employed applicants, the difference is in how your income is assessed, not the rates available to you.
Do I need an accountant?
You don't legally need one, but if you are a company director most lenders require accounts that have been prepared or verified by a qualified accountant. If you don't currently use one, we'd recommend it — it makes the mortgage process much smoother. However, we do also have options for clients who self-assess.
What other mortgage services do you offer?
As well as self-employed mortgage advice, we advise on contractor mortgages, adverse credit mortgages, mortgages for professionals, and mortgages for NHS workers. We also cover the full range of residential mortgage advice including first time buyers, remortgages, and buy-to-let.
Why Choose Aspect Mortgages?
Independent and FCA regulated. We work for you, not for the lender
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Family run since 2004 with over 100 years of combined team experience
Local office, national reach. Serving clients across Lancashire, Greater Manchester and nationwide.
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There will be a fee for mortgage advice. The precise amount will depend upon your circumstances but we estimate that it will be £495 for a residential/buy to let mortgage or £1495 for an equity release/retirement mortgage.
Aspect Mortgages Limited is authorised and regulated by the Financial Conduct Authority and is entered on the Financial Services Register (https://register.fca.org.uk/s/) under FCA reference 305352. The FCA do not regulate Business Buy to Let Mortgages.
As independent advisers we have access to the whole market, except for deals that you can only obtain by going direct to a lender. Registered in England and Wales No: 051013801. 16 St Thomas' Road, Chorley, PR7 1HR.
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