Last reviewed on 16th August 2023 by Martin Alexander (Mortgage Advisor)
“I’m self-employed and need a mortgage, but I only have two years’ accounts, is this possible?”. The answer is YES! A self-employed mortgage with 2 years’ accounts is possible with the right approach.
Most lenders ask for at least three years of account history from self-employed applicants. This can be a stumbling block, especially if your business hasn’t been trading that long, or you’ve recently changed your business structure (sole trader to a limited company).
The good news is that there are lenders that may approve a mortgage with 2 years’ accounts. Some lenders will even approve a mortgage with one year’s accounts. High street lenders will likely decline self-employed applicants who can’t show at least three years of trading history.
How can I get a mortgage with 2 years’ accounts?
You’ll more than likely need a specialist lender if you only have accounts for 2 years. This is because high street lenders generally require accounts for three years.
High street lenders are also a lot more restricted in what they can approve. If you find yourself in this situation, then please read the below.
Specialist self-employed lenders
If you need a self-employed mortgage with 2 years’ accounts, then you’ll most likely need a specialist lender. This is because specialist lenders offer a lot more flexibility in tricky situations such as when you only have two years’ accounts.
We’re often speaking to applicants that have been declined by other brokers or their own banks, simply because they don’t have 3 years’ accounts. It can be quite frustrating, especially when you’ve seen a property and need to take immediate action. This tends to happen to borrowers who have been misinformed regarding mortgages.
On a positive note, our expert advisors have secured mortgages for many self-employed applicants with less than three years’ accounts, even after being declined by other brokers and lenders.
Self-employed mortgage specialists
A specialist advisor can make all the difference in your application being declined or approved. It’s also not as simple as approaching a specialist lender yourself, as this doesn’t guarantee you’ll be approved.
If you only have 2 years of accounts, your application should be:
- Placed with the best-suited lender
- Meeting your lender’s exact requirements
- Be placed with the most competitive mortgage rate you qualify for
If your mortgage application isn’t placed with the best-suited lender, you risk being declined. Specialist lenders still have criteria that they need to fulfil when assessing your application and are by no means an easy pass to getting a mortgage.
Each applicant has unique circumstances. Your financial circumstances may suit some lenders better than others. This is why the knowledge and expertise of an expert mortgage broker are so important, as we’ll know exactly which lender to place your application with.
Preparing your mortgage application
Your mortgage application also needs to be packaged in the correct manner. This is because underwriters can request further documentation in order to approve your mortgage application. If you’re not prepared for this, it can quickly result in you being declined.
An experienced broker should get as much information and documentation as possible before it even reaches the underwriter. Preparation is key to achieving a smooth mortgage assessment.
Finally, brokers with access to the whole market can pretty much guarantee they’re getting you the best product based on your circumstances. An experienced broker shouldn’t just attempt to secure you a mortgage, but should also search the entire market for the best rate available.
Accountants and documents
Although not always necessary, having an accountant can help. Not everyone that’s self-employed will utilise the expertise of an accountant. However, having accounts that are signed off by a qualified accountant helps lenders to understand your income in greater detail. An accountant also adds a hefty amount of credibility to your mortgage application!
You will certainly need your SA302 documents, which can be downloaded online from the HMRC portal or requested from the HMRC via post. SA302 documents also prove your income as it’s an official document of your declared income for a certain tax year. In this case, if you have two years of accounts, you should have two SA302 forms.
I need a mortgage with 2 years’ accounts
If you have two years’ accounts and need a mortgage, our expert mortgage advisors can help. Clients use our services time and time again for the following reasons:
- Independent advisors with access to the whole market
- Always ensure the best mortgage rates possible for you
- Experienced, qualified and knowledgeable advisors
- Specialist brokers (self-employed, bad credit, complex circumstances)
- Understand each lender’s criteria
If you require a mortgage with 2 years’ accounts, you can speak to an expert mortgage advisor to get started.
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.