The reason for this new newsletter is because we are seeing far too many self-employed people and SME company directors being refused mortgages, when some joint forward planning between accountant and client could have avoided many of the problems and changed mortgage application declines into approvals.
To go with this newsletter we have a new website, with a page dedicated to giving you the sort of helpful information you should know about when you have a client who say’s they will be looking for a mortgage.
Forward planning and preparation is the key.
When you have your annual meeting with clients, a question you might ask is “do you have any thoughts about applying for a mortgage in the next year or two?”
Why is this question so important? It’s important because with self-cert mortgages no longer available, good accounts and sufficient personal drawings are essential. All mortgage lenders now want to see proof that the mortgage being applied for is affordable. In addition to financial expectations for the current year, they want to see sufficient income for the previous one or two years, and it must be proven, either with accounts, accountant’s certificates or SA302’s with Tax Year Overview’s.
Your clients expect you to reduce their tax liability as much as possible using all legal means, but that can, on occasion, result in insufficient profits or income to support their mortgage application.
So by asking the question above when you see your clients, you could be in a position to help them be well prepared in advance and get all their ducks in a row before making a mortgage application.
Stable or increasing profits, regular, consistent income supported with printed payslips and personal bank statements showing income received – these are all important. So having the conversation with your clients early could mean the difference between success and failure.
Please visit Accountants on our website where we cover these subjects and others in more detail. The page will be kept up to date with any new developments affecting the self-employed, so please refer to it whenever you want know something about the mortgage market.