Can I Get a Mortgage with 1 Year's Accounts: A Complete Guide

Summary: Yes, it is possible to get a mortgage with just one year’s accounts. Well, you will have fewer options available to you in comparison to someone with three or more years. Getting it can be difficult, but not impossible, because expert lenders will help you in this process. But not everyone can get it.

If you are a sole trader, company, contractor, or self-employed individual, then you will be able to apply for this self-employed mortgage. Money issues make it difficult for many. Authentic evidence of your income is required, and there are many things, such as your type of employment, credit score, deposit, and the property type, that also affect your ability to get a mortgage with 1 year’s accounts.

-------------------------------

Securing a mortgage can feel like navigating a maze, especially if you are self-employed or run a small business. One common question that arises in this case is whether it is possible to get a mortgage with just one year’s worth of accounts.

Reputed lenders typically look for a stable financial history, but there are strategies and options available to make homeownership achievable even with a shorter track record. It means the potential homeowners have the right to buy with the help of alternatives and proceed with confidence. In this blog, we will explore everything about getting a mortgage with 1 year's accounts.

Who Can Obtain a Mortgage with 1 Year's Accounts

Let’s find it!

Self-Employed Individuals

If you are a self-employed applicant with only one year of accounts, you can secure a mortgage if your income is stable and can be clearly documented. Lenders will assess the profitability of the business, personal drawings, and any supporting evidence carefully. It will help them ensure that you can reliably meet the mortgage repayments.

Small Business Owners

Start-up business owners who are running a small business may also qualify for a mortgage if their first-year performance can demonstrate growth potential and profitability. The best mortgage advisors will help when lenders look for projected earnings, business plans, and industry trends to gauge future income stability before approving the mortgage.

Freelancers Or Contractors

Freelancers or contractors with limited financial history can often obtain a mortgage by providing evidence of signed contracts, consistent work, and recurring clients. Lenders focus on demonstrable and reliable income to ensure that you have a predictable cash flow that is sufficient to cover mortgage obligations.

High-Income Borrowers

Applicants with a high annual income may be considered by lenders in getting a mortgage with 1 year’s accounts. It can be said that the confidence of a lender comes from the strong earnings of the borrower. It reduces the perceived risk and allows high-income individuals with a shorter financial record.

Why Is It Difficult to Get a Mortgage with 1 Year's Accounts

Moving home can be difficult, but getting a mortgage when you are newly self-employed can be more difficult because the lenders want proof of income as much as possible. To be honest, with just one year of records, it is quite impossible to demonstrate business stability, consistent income, and long-term profitability. Lenders are concerned about incomplete financial documentation and fluctuations in earnings. Lack of track record typically represents your disability to manage repayments over time.

In addition, traditional criteria often require at least two or three years of accounts to verify trends and ensure that income is not the only thing to check. Without this, lenders may reject your application or offer less favourable terms, such as a lower ratio or higher interest rates, to mitigate potential risks.

What Will Affect the Ability to Get a Mortgage with 1 Year's Accounts

Let’s find it!

Type of Employment

Lenders consider the nature of your employment when assessing residential or commercial mortgage applications with limited accounts. Income may fluctuate, and for this reason, self-employed individuals are scrutinised more closely. On the other hand, full-time employees with a regular salary may have an easier time and pose less risk.

Your Credit Score

If you have a bad credit issue on your professional file, it poses a red flag. Your credit score could affect the rates you can get and the amount you are going to borrow.

Your Deposit

It can be said that the larger a deposit you have, the more attractive you will be to more mortgage lenders as an applicant. For any reason, if you are borrowing less, the risk to the lender also lowers.

The Property Type

The type of property you wish to buy can influence the decision of a lender. Unusual properties such as new builds, flats in converted buildings, and non-standard constructions may be considered higher risk. Standard houses are typically easier to mortgage.

Securing a mortgage with just one year’s accounts can be challenging, but it is possible for high-income earners and good credit score holders. Based on these, lenders will assess property type, income stability, and deposit size. So the right mortgage product and careful preparation with all required documents can make your homeownership achievable.