What documents do you need for a bad credit self-employed mortgage?

Although the specific requirements can vary depending on the lender, there are some typical documents you might need.

  1. Proof of income
  2. Sole traders most lenders will request you provide the latest 2 years HMRC tax calculations with supporting overviews & it is essential that they match otherwise they will not be accepted. However, most bad credit specialist lenders will accept just one year’s trading and will also use the figure shown on the most recent documents compared to high street lenders that will traditionally average your income over the past 2 years which can reduce your income.
  3. CIS workers you’ll be pleased to hear that some specialist lenders will accept your CIS vouchers as proof of income. In a lot of circumstances these can often be more favourable than using tax calculations as these are prior to expenses being claimed which means you are able to borrow more.
  4. limited company Directors if you would like to use your retained profits as your proof of income, then most lenders will need to see your latest 2 years finalised company accounts. This can be a great way to maximising your borrowing capacity whilst reducing your personal tax liability.
  5. Accountants’ certificates – Lots of lenders will accept these to verify your income providing they hold the required lender qualifications
  6. Credit Reports are essential for all mortgage applications as it enables your mortgage advisor to assess your circumstances, these are not required just to establish your credit worthiness but also to calculate your affordability by assessing the information about your monthly outgoings. For example, any loans, credit card payments, and other financial obligations.
  7. Debt-to-Income Ratio: Lenders will assess your debt-to-income ratio to determine your ability to repay the mortgage. Be prepared to provide information about your monthly debts, including loans, credit card payments, and other financial obligations.
  8. Other Documentation: Depending on the lender and your specific situation, you may need to provide additional documentation. This could include letters of explanation for any gaps in employment or income, proof of residency, or other supporting documents.
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