Income for mortgage purposes

jilt

This may seem a stupid question but I'll ask anyway. Our fixed mortgage expires in January and we are considering looking elsewhere rather than automatically renewing with our provider again.

As it's the first time since being self employed that I've had to provide proof of income I do submit my trading accounts which include depreciation? They don't want to know taxable income?

T.C.

A mortgage company will usually ask for an accountants report on income - sometimes one year, sometimes three. The usual figure would be the 'income from self-employment' from the tax return.

Monsoon

Different lenders vary, but broadly it's as TC says.

I'm not sure how it works with an accountant doing your own accounts though!

Edit: your mortgage adviser will be able to tell you, anyway

jilt

Thanks guys, good job I asked, thought they'd want to see accounts not tax returns!

Don't worry Jenni, I don't expect I'll be able to send in my own accounts, I presume I'll have to get both mine and my hsubands signed off by someone else and thats another bridge to cross lol

So clients wouldn't simply be able to hand over their bound accounts from their accountant they need a specially prepared report. Hmmm, does this mean I would have to pay someone to redo mine and my husbands accounts?

Monsoon

I don't think you would have to re-do - you are a qualified accountant yourself. Different lenders will have different requirements. Some lenders ask for additional proof by seeing the HMRC statement of account to check it agrees with the accounts.

It honestly depends what lender you go with so I wouldn't worry until you talk to your mortgage advisor.

T.C.

I have signed off my own accounts for mortgage purposes with no problem at all! So long as you are qualified to do the job, they are usually fine. As I say, never had a problem!

jilt

Well I give it a try, bit dubious though as our current lender is Santander!! Will shop around as well this time though. Thanks for your help TC and Jenni

T.C.

No problem. You may find that a financial adviser would find you a good deal - I always use one - worth it in the end.

Monsoon

Santander do accept AAT accountants (at last!) which helps!

And yes, definitely shop around. If you want a good mortgage advisor, I have a great one to recommend if you want it.

T.C.

Me too, depends where you are. I use a good one from Lincolnshire.

deanshepherd

Lenders are great when it is your clients accounts you are verifying but not when it's your own.

I am with Santander and they were even more horrendous than HSBC (who I had a mortgage with last time).

If you are a sole-trader they will only accept the SA302 tax calculation from HMRC as proof of income. Even a signed mortgage reference from an ACCA friend of mine wasn't accepted.

This time round I had to submit full company accounts for past three years. Only I changed my company name last year which through a right spanner in the works!

Good luck!

Bluewednesday

SA302, haven't seen one of those for years, do HMRC send one on request?

jilt

Cheers Dean, made me feel a lot better :crying:. I'll let you know how I get on.

deanshepherd

Bluewednesday wrote: »

SA302, haven't seen one of those for years, do HMRC send one on request?

Yep.

jilt

Well we've both requested them for the past 3 years in readyness that we're asked for them. Next!!

Typical, just depends who you get, Santander have told me they need accounts showing gross and net profit signed by an accountant. I told her I was an AAT accountanct did that count and could I produce mine, his or both, all I got was long 'as they're signed by a qualified accountant'!! Bit like HMRC

T.C.

Just been asked for an accountants report from Northern Rock. They state that in their letter they require the certificate to be completed with the 3 years details, but if I am not Chartered or Certified then they also require SA302. However, they go on to state that the recognised qualifications are FCA, ACA....MAAT... etc??? So presumably they accept MAAT as "certified". Oh, well they accept it anyway. They just don't know what the qualifications mean I guess!

Doug7

Mortgage applications

Good news
Recently obtained re-mortgage for client Santander had to verify 3 years of LTd company accounts, standard Santander form asking for Sales profit and Divs . No per tax SA302 calcs ask for .

deanshepherd

SA302s are usually only required for sole-traders, not companies.

jilt

jilt wrote: »

Typical, just depends who you get, Santander have told me they need accounts showing gross and net profit signed by an accountant. I told her I was an AAT accountanct did that count and could I produce mine, his or both, all I got was long 'as they're signed by a qualified accountant'!! Bit like HMRC

Right accounts for the past 3 years are prepared and SA302s available (although for 2010-2011 I've simply printed from ftax, suppose they'll require one on HMRC's letterhead) however where I usually put my report and clients approval on clients accounts I'm unsure what wording to put on my own.

Any suggestions would be appreciated.

Gem7321

jilt wrote: »

SA302s available (although for 2010-2011 I've simply printed from ftax, suppose they'll require one on HMRC's

Yep in my experience they will only accept the SA302 from HMRC. We still get mortgage advisors calling us asking for the SA302 and they expect us to email it to them immediately. I always reply by saying that our tax calculations are always correct therefore HMRC don't send the SA302 automatically and it has to be requested you'll be waiting around 3 weeks.

jilt

Gem7321 wrote: »

Yep in my experience they will only accept the SA302 from HMRC. We still get mortgage advisors calling us asking for the SA302 and they expect us to email it to them immediately. I always reply by saying that our tax calculations are always correct therefore HMRC don't send the SA302 automatically and it has to be requested you'll be waiting around 3 weeks.

We did very well then we got the 08,09 and 10 ones within a week! 2011 tax return is done so suppose I'd better file them.