During 2014 we have had plenty of success with mortgage lending based on one years self employed accounts. Client’s who have only been trading for one year, or who have changed in status – for example from sole trader to Limited Company Director or who’s fortune has improved since the credit crunch have all found this mortgage lending policy very useful.
The highest Loan to Value (LTV) i.e. mortgage amount in relation to the property value to which this applies is currently 90% LTV, however with the government’s Help to Buy schemes it is possible that only a 5% deposit will be required. Following the agreement in principle process will help determine whether a 5% or 10% deposit will be relevant to your individual circumstances.
For those of you who have been trading for several years in the same capacity, and believe it best the bank assess you on your latest year’s figures then this can also be achieved. Up to 75% LTV I believe we can lend 5 times your net profit if you are sole trader, or 5 x your salary and dividends if you are a company director, or salary plus share of net profit if you are a partner. If you require lending above 75% LTV it is probably wise to work on the basis that the bank or building society will provide a mortgage of 4 times your income.
If necessary, please give me a call and we can discuss how you can achieve your plans in more detail.