Last reviewed on 5th August 2023 by Martin Alexander (Mortgage Advisor)
Applying for a mortgage as an accountant can have some advantages but can also raise a few challenges along the way. Many accountants earn sizeable salaries but if you’re self-employed, you may come across hurdles during your mortgage application.
The main issues arise around affordability as self-employed applicants tend to show lower earnings to minimise tax payments. On the other hand, there are lenders that may offer preferential mortgage deals to accountants, simply because of the profession you’re in.
Whether you’re a junior accountant, have recently started a new accounting role, or are a seasoned accountant who has been trading for decades, we can help.
This guide will explain everything you need to know about applying for a mortgage as an accountant. You can also make an enquiry if you have any questions.
Why are mortgages for accountants sometimes easier to obtain?
If you’re a qualified accountant, it’s likely you’ve endured several years of education and training. As a result, you’ll likely stay in the accounting profession for most of your working life. Some lenders recognise this and therefore offer flexibility to accountants applying for a mortgage.
Even if you’re a freelancer or are self-employed, lenders may be less strict during their assessments simply because of your profession. It’s unlikely you’ll struggle to gain work as an accountant, so lenders assume that repaying a mortgage shouldn’t be an issue.
It’s also unlikely you’ll choose another profession after all the years of studying and so as an accountant, you become a low-risk borrower. This doesn’t mean to say that if you’re an accountant you’re guaranteed to get a mortgage. You’ll still need a structured application while documenting your income and ability to repay a mortgage.
Lenders will also carry out their regular mortgage checks, such as checking your credit score and affordability.
Obstacles for accountants applying for a mortgage
You may come across obstacles as an accountant applying for a mortgage. This is likely to happen when you’re self-employed or your work is mainly from freelancing. The problems generally arise because of irregularities in income.
Each lender has its own method of assessing an applicant’s affordability. While some lenders are flexible, others can be very strict. This is especially true when applicants with irregular incomes are assessed, including accountants. Furthermore, if you’ve just started a new accounting practice, your income may not be as stable as you’d like.
If you’re an established accountant and have declared a low income to minimise your tax bill, you may run into issues with borrowing a sizeable amount. This is because lenders will use your net profit amount to determine your affordability.
Proving your income as a chartered accountant
Having a well-prepared application is crucial in getting a mortgage as an accountant. You’ll need copies of at least three to six months’ worth of payslips if you’re an employed accountant.
If you’ve just started a new role, then having a working contract can be just as important for lenders to assess your income.
You’ll need three years’ worth of accounts if you’re a self-employed accountant. Don’t panic if you don’t have accounts for three years, as some lenders will accept you even with one year’s accounts.
Lenders understand that self-employment varies for each individual and are likely to accept SA302 tax returns from the HMRC.
Mortgage lenders for accountants
Once you’ve established your income type, lenders will assess your affordability in their own unique way. Lenders will use an average income, whereas others will use your latest income figures or your highest income figures.
Choosing the right lender can be important when you’re trying to maximise the amount you can borrow. If you want to use your latest income figures, certain lenders will be more suitable than others.
Applying with the most suitable lender also improves your chances of being approved. Furthermore, you’re likely to be offered the loan amount you require. Some lenders are more tailored to suit those in the accounting profession and can be flexible for circumstances that aren’t straightforward.
Choosing a lender should be based on your circumstances rather than the deals they’re offering. There is little incentive to apply with a lender that may decline you and is unlikely to offer you the amount you require.
Specialist mortgage advisors for accountants
As an accountant, you’ll understand that there are particular skills and expertise to your craft that qualify you to do what others can’t. The same thing can be said about mortgage advisors.
If you’re thinking about applying for a mortgage, speak to an advisor beforehand. We’ll run through all the options with you and as an accountant, we may be able to secure you a favourable rate with a handful of lenders.
As mentioned, some lenders may allow for flexibility and this can be the difference between being approved and even being offered a higher loan amount than normal.
Our advisors have been helping accountants with their mortgages for decades. As an accountant yourself, you’ll understand that small differences in numbers can have a huge impact and for mortgages, it couldn’t be more true.
While you may be familiar with number crunching, our advisors can prepare your application while understanding which lenders will suit your needs. Whether you’ve just started your role or you’re looking to use your latest accounts for affordability, we’ll find a lender that’s suitable.
About the author
Martin is a senior mortgage advisor and has held a CeMAP qualification for over 15 years while also completing an MBA in Global Banking & Finance.