Securing a mortgage or remortgaging an existing property can be a complicated and lengthy process, particularly for self-employed individuals and company directors. The documentation required by mortgage companies can vary, but understanding what is typically needed can help streamline the process. Here's a detailed guide on what information you'll need to provide if you fall into either of these categories.

Information required for all applicants

Regardless of your employment status, there are certain pieces of information that all applicants must provide:

  1. Proof of identity: A valid passport or driving license.
  2. Proof of address: Recent utility bills or council tax statements, usually dated within the last three months.
  3. Credit history: A detailed credit report.
  4. Bank statements: Usually, the last three to six months of statements.
  5. Deposit proof: evidence of the source of your deposit (e.g., savings, gift).

Additional information needed for self-employed individuals

Lenders will require more detailed evidence of your income and financial stability if you are self-employed. The following documents are typically required:

  1. Proof of income:
    • SA302 forms: These are self-assessment tax returns issued by HMRC. Lenders usually require the last two to three years of SA302 forms.
    • Tax year overviews: Accompanying the SA302 forms, these provide a summary of your tax returns.
  2. Accountant's reference:
    • A reference or letter from a chartered or certified accountant may be required to confirm your income and financial stability.
  3. Business accounts:
    • Full business accounts for the last two to three years, prepared by a chartered or certified accountant.
  4. Business bank statements:
    • Some lenders may also ask for business bank statements for the last six months.
  5. Contract Details:
    • If you work on a contractual basis, copies of your current and previous contracts.

Additional information for company directors

As a company director, your personal and business finances are closely scrutinised. Here's what you typically need to provide:

  1. Proof of Income:
    • Personal tax returns: SA302 forms for the last two to three years.
    • Tax year overviews: Summary of your personal tax returns.
  2. Company accounts:
    • Full accounts for your company for the last two to three years, ideally prepared by a chartered or certified accountant.
  3. Dividends and salary evidence:
    • Proof of any dividends received in addition to your salary.
    • Payslips to show your salary, if you pay yourself a regular wage.
  4. Bank statements:
    • Statements for the company bank accounts and your personal bank statements for the last three to six months, depending on the lender.
  5. Company performance:
    • An overview of the company's performance, including profit and loss statements and balance sheets.

General tips for self-employed and company directors when trying to secure a mortgage

  1. Maintain accurate records: Ensure all financial records are correct and up to date. This not only helps in securing a mortgage but is also essential for your business's financial health.
  2. Consult with professionals: Work with a chartered or certified accountant who can help prepare and present your financial documents correctly.
  3. Improve your credit score: Regularly check your credit score and seek ways to enhance it if necessary. Lenders place significant weight on your credit history.
  4. Be prepared for scrutiny: Understand that lenders may scrutinise your financial situation more closely than salaried employees. Be ready to explain any irregularities in your income or business performance.
  5. Seek mortgage advice: Consult with a mortgage advisor specialising in self-employed or director mortgages. They can guide you to lenders who are more familiar with your financial circumstances.

By providing comprehensive and accurate information, self-employed individuals and company directors can enhance their chances of securing a favourable mortgage or remortgage deal. Preparation is key, so gather your documents early, consult with professionals, and understand the requirements of potential lenders.

How can DWilkinson&Company help?

We regularly help our clients with the information they need to mortgage or remortgage their homes or business premises. We are happy to put together the documentation you will need, as outlined in the above article. However, as part of our ongoing client work, you should already have most of the information. We can also contact HMRC on your behalf to request the SA302 forms, but please be aware they can take several weeks to be issued, so you must factor this timeframe into your mortgage or remortgage process.

If you require any help when mortgaging or remortgaging your property, please contact us at 0113 320 0001 or email office@dwco.co.uk