Getting a mortgage as a self employed person can sometimes be tricky. As specialist self employed mortgage advisors, we know this too well. Whether you have a small freelance business or are the head of a large company, every self employed person has to file their tax figures to HMRC to prove how much they have earned and how much they owe. Normally tax is submitted and calculated every year and a lot of self employed people use the service of an accountant to help complete this. When it comes to self employed people getting a mortgage, a lender will generally need to see two or three years full completed accounts to prove your income and calculate your mortgage affordability. But, what if your accounts aren’t quite ready yet? Ever heard of the Santander accountants certificate?
What Do Mortgage Lenders Need To See For Self Employed People?
Aside from the usual proof of ID, Proof of residency, Proof of deposit, and 3 months bank statements, mortgage lenders will need to see proof of self employed income when applying for a mortgage. For limited company directors who receive salary and dividends, a mortgage lender will generally need to see two or three whole years limited company accounts, completed by a certified accountant. They will look for how much salary you were paid, how much dividend you received from the company, and in many cases, the net profit of the business.
But what if your accountant hasn’t completed your latest years accounts yet? This is an issue that we see a lot with self employed people, and certainly isn’t uncommon. Due to how the tax years work out, frequently people go to get a mortgage and their latest full year hasn’t been calculated and completed yet. For a lot of lenders, this is not acceptable and they will need you to wait until you have got your latest full year accounts completed before they can consider lending to you. This could mean that in some cases, people will need to wait months and months before they can get a mortgage with a lender. But, there is potentially a way forward.
What Is The Santander Accountants Certificate?
Santander, one of the high-streets most popular lenders is leading the way with their criteria around self employed people. They do require self employed people to have three years trading, however they understand the difficulties that some people run into when their accounts aren’t completed in time. Identifying these issues, Santander introduced something called the Santander accountant’s certificate. So what is the accounts certificate?
This certificate, available through mortgage applications with mortgage advisors, is a form that you can send to your accountant and they can record how much salary, dividend, and net profit your business will provide when your next accounts are completed. As a qualified and accredited accountant, Santander can use this certificate as proof of income without actually seeing your completed accounts. Essentially, they will use any existing full accounts figures you have from previous years, plus the predicted income figures that your accountant has provided on the accountants certificate.
The income declared and accepted by Santander at mortgage application stage from the certificate must be from the UK and must have paid UK tax. The income figures MUST NOT be falsified in any way as this is a crime and can result in fines and jailtime if it is.
I Am Self Employed And Need A Mortgage, Where Do I Start?
If you are self employed and need to get a mortgage, the worst thing you can do is try to navigate the mortgage market alone. As we have already discussed, getting a mortgage as a self employed person can be tricky. So we are here to help. You need to get expert help and guidance from a mortgage advisor to make sure that your income is used effectively and you get the most out of your mortgage application. At Oportfolio mortgages, we are specialists in self employed income mortgages so give us a call today for a free initial consultation. We are here to help!