UK mortgage guide
Self-employed mortgage documents: what lenders want to see
· 6 min read
Being self-employed does not stop you getting a mortgage, but lenders usually want more evidence of your income than they do from an employed applicant. They want to see that your income is stable, and the way you prove it depends on whether you are a sole trader, in a partnership or a company director.
Why lenders ask for more
Employed people can show payslips. Self-employed income can change from year to year, so lenders look at a longer period, often the last 2 or 3 years, to get a picture of what you earn.
Documents for sole traders and partners
- SA302 tax calculations for the last 2 to 3 tax years
- The matching tax year overviews from HMRC
- Business bank statements, often for the last 6 to 12 months
- Personal bank statements, usually 3 months
- Proof of identity and address
Documents for limited company directors
- Your SA302s and tax year overviews, if you take dividends
- Company accounts for the last 2 to 3 years
- Evidence of your salary and dividends
- Business and personal bank statements
- In some cases, evidence of your share of the company
Accountant’s certificate
Some lenders accept a letter or certificate from a qualified accountant that confirms your income instead of, or alongside, the SA302s. Whether this is accepted depends on the lender, so ask your adviser.
How lenders assess your income
Lenders usually use an average of your income over the period, or the most recent figure if it is lower. Companies and sole traders are assessed differently. A good adviser will know which lenders suit your situation.
Tips to prepare
- Download your SA302s and tax year overviews from your HMRC online account.
- Keep your accounts and bank statements organised by year.
- Avoid large unexplained transfers between personal and business accounts.
- Talk to an adviser early, since lender criteria for the self-employed vary widely.
Frequently asked questions
How many years of accounts do I need as self-employed?
Many lenders ask for 2 to 3 years, though some accept 1 year in certain cases. Your adviser can tell you which lenders fit.
What is an SA302?
An SA302 is a summary of your income and tax calculated from your Self Assessment tax return. You can get it from HMRC.
Can I get a mortgage if I have only been self-employed for a year?
It can be possible with some lenders, but your options may be more limited. A mortgage adviser can tell you what is available.
Sources and further reading
- MoneyHelper: how to apply for a mortgage, including the documents you need
- MoneyHelper: free, government-backed money and mortgage guidance
- Financial Conduct Authority: consumer information on mortgages
- GOV.UK: view and prove your immigration status
- GOV.UK: HM Revenue and Customs (tax records and online account)