If you are self-employed with limited records, then getting a mortgage without accounts may feel like a far-fetched dream. But what if we tell you it’s possible? Self-employed mortgages without accounts can be the game changer for many.

The application process can be intimidating but with this article, let’s break it down to the very scratch, what you need, and what you shall do to improve the odds. 

Is It Possible to Get a Self-Employed Mortgage Without Accounts?

With lenders preferring two to three years of accounts or tax returns to feel confident about lending you money, it is natural to think a mortgage for self-employed without accounts​ is impossible. However, we are here to tell you that it very much is, especially with considerable and specialist lenders. 

Your goal is to make your application stronger without the accounts by using other types of proof that you can afford the mortgage. While it’s a bit more complex than it would have been with 2-3 years of accounts, the right approach will take you to the destination, no matter the bumpy road.

How to Secure a Mortgage Without Accounts

Securing a mortgage without accounts follows a similar type of application process as a standard mortgage but you want to target lenders who specialise in a client base similar to your circumstance. There are a few things you can do from your end to increase your potential as a borrower.

Strengthen your application.

As you have no accounts to show, everything else in your application has to look strong. This is not limited to just your income. This includes clear, well-organised bank statements, client contracts, clean credit history with a high score as well as evidence of future contracts that show you are in this for the long run.

Be open to offering a larger deposit.

It is a misconception that you have to offer a large deposit in unique situations. However, a big deposit can make a huge difference no matter what, as it reduces lender’s risks. Apart from making you look like an attractive borrower, it can lead to favourable terms as well like lower interest. While many mortgages in the UK require a deposit of around 5-10%, offering 20% or more can truly up your chances as a self-employed applicant for a mortgage without accounts.

Work with a specialist broker.

For situations that can be considered unconventional like self-employment and no accounts, working with an experienced broker can turn out well. A broker has connections that a common person may not be able to access, so working with them helps you match with the right lenders. They will also sort your paperwork in the ideal way, presenting your case in the best light possible. 

What Can You Show Other Than Accounts?

Here are some documents to attach to your application for mortgages for self-employed without accounts​ so that lenders can access and verify your income. 

• Letter from an accountant:

So what if you don’t have accounts? Work with an accountant instead so they can write a letter or certificate verifying your income, which many lenders accept.

• Bank statements:

In order to understand your regular income and outgoings, lenders would seek six to twelve months’ worth of bank statements.

• Tax returns:

People who have their own businesses must have SA302 forms from His Majesty’s Revenue & Customs (HMRC). These tax returns can show your income even without full accounts.  

• Invoices or contracts:

For those working on a contract basis or with clients on a freelance or business, showing proof of ongoing work (as well as future contacts) can help prove your financial stability.

• Proof of deposit:

If lenders understand that you have enough deposits saved up, it reassures them about your financial standing and management skills. 

These documents, while not a replacement for full accounts, can still act as a pretty good cover-up and give lenders confidence to lend to you. 

How Much Could You Borrow?

The amount you can borrow will depend heavily on the evidence you provide to show your income. There are calculators to understand these amounts but many lenders usually use an income multiple of around four to five times your annual income, to figure out how much you can borrow. 

As every lender is different, they come up with different policies and criteria. Some may underestimate your borrowing capacity despite a strong income, and this is where factors like a large deposit and a high credit score can tip the scales your way. 

The Importance of a Strong Credit Score

A healthy credit profile can make the deal in general mortgage situations. When it comes to a self-employed mortgage without accounts, a high scredit can significantly boost your chances even more. With the high credit score in the spotlight, lenders are more likely to overlook the absence of traditional accounts.

If you already have a high score, then do what’s needed to maintain it. However, for the ones with a lower score, it should be your utmost priority to increase it before applying. Start with paying off outstanding debts. Use your credit wisely by keeping your credit card balance low and making sure to pay off the full amount each month, or avoid taking on new credit at all. 

Check for errors on your credit report by taking an expert’s help. Even small mistakes can lead to unfair yet big consequences. Lastly, if you aren’t registered to vote, consider being a voter as being on the electoral roll helps lenders verify your identity, which can improve your credit score. 

Different Types of Mortgages for the Self-Employed

Fixed-rate mortgages lock in your interest rate for a set period, perhaps 2-5 years. This helps young professionals prepare and budget well. 

There’s also a tracker mortgage which is a riskier option but can work out in your favour as it follows the Bank of England’s base rate. This means your payments can go up or down depending on the market. So if rates fall, cha-ching for you!

With an offset mortgage, you link your savings account to your mortgage. This can reduce the interest you pay. The bank only charges interest on the difference between your mortgage balance and your savings. This is a good option for those who have savings but would like more flexibility. 

Conclusion

Securing a self-employed mortgage without accounts is only tough if you aren’t approaching with the right strategy. When having a strong income while being open to offering a large deposit, don’t let no accounts stop you from taking a step towards your dream.  

A mortgage broker can help put your steps in the right places so that your path to owning a home in the UK is clear and achievable. Contact our team at UK Mortgage Finder so we can take you to your destination with friendly and professional expertise.