Following our ongoing commitment to ensure our mortgage credit policy is fit for purpose, we’re changing how we evidence income from self-employed mortgage applicants, resulting in a smoother journey for you and your customer.

What’s changing?

We’re updating the evidential documents we require to support self-employed mortgage applications and are changing the business bank statements we ask for. We will no longer require statements from January, February or March 2020 along with the latest 60 days’ statements.

With effect from today, Monday 9th August, we will require the following documents to support your customer’s application:

Sole Traders and Partnerships (incl. LLPs with less than 200 partners)

  • Last two years Tax Calculations and corresponding Tax Year Overviews
  • The latest three months’ worth of business bank statements (or personal account statements if used for business purposes) of which the latest must be dated within 35 days of the application. The business bank statements should include the monthly summary sheet detailing the total credits and debits for the month;
  • Last two years SA100s (tax returns), plus the SA103 supplements.

Limited Company Directors

  • Last two years finalised accounts, the latest of which must be dated within the last 18 months;
  • The latest three months’ worth of business bank statements (or personal account statements if used for business purposes) of which the latest must be dated within 35 days of the application. The Business Bank Statements should include the monthly summary sheet detailing the total credits and debits for the month.

A commercial credit search of the business may also be completed, please ensure you gain your customers consent for this purpose. This is not a full credit check and will not appear on the business’s credit file.

Please note, there are no changes to the requirements for LLPs with 200 or more partners.

How we assess the application

We’re also changing the way we assess self-employed mortgage applications to ensure that the income used in the affordability assessment is suitable:

  • If the customer has submitted their financial accounts/tax returns after the 30th September 2020, we will deduct any grants and loan repayments, to give us an adjusted net profit position.

Alternatively, we will consider net profit from the previous year, deducting any grants and loan repayments and adjusting net profit based on current trading levels.

  • If the customer has submitted their financial accounts/tax returns before the 30th September 2020, then we will deduct any grants and loan repayments and adjust net profit based on current trading levels.

Our Broker website will be updated shortly to reflect the above changes.

Further information

Talk to us using Live Chat, call our Broker Support Team on 0345 600 5847 (Monday to Friday, 9am to 5pm) or contact your local BDM