As we race towards the end of another tax year, it’s the perfect time for those of us who are self-employed to start thinking about what the next financial year might bring. Now, I know that for many businesses, dealing with accounts might feel like something to leave until the last minute – but I’m here to tempt you to be a little more proactive!
If buying a property is on your radar in the near future, there’s one thing I can’t stress enough: speak to a mortgage broker BEFORE your accountant finalises your accounts. Yes, you read that right. In fact, I’d go as far as saying it should be a non-negotiable part of your property-buying plan.
Why is Speaking to a Broker Early So Important If You’re Self-Employed?
You may be wondering why timing is so important in this process. The answer lies in how your financials are presented. Most self-employed individuals work closely with their accountants to get their accounts in order at the end of the tax year. However, if you wait until your accountant has finalised everything, you could miss an opportunity to optimise your mortgage application.
By sitting down with a mortgage broker before your accountant completes your accounts, we can work together to ensure that your figures are positioned in the best possible way for lenders. This means we can help you maximise your mortgage affordability while also making sure that your tax efficiency isn’t compromised.
Another important thing to note is that lenders are often happy to use your year-end figures for up to 18 months before they ask for a more recent set of accounts. This means that the figures on your tax documents for April 2025 could be used as late as October 2026. By getting your accounts finalised early, you’re effectively giving yourself more time to search for a property without the pressure of affordability fluctuations. Of course, this assumes that your business remains stable and your expenses don’t increase, but getting ahead of the game can give you that extra breathing room to secure the right property without rushing.
The Key Benefits of Early Preparation For The Self-Employed;
- Maximise Your Mortgage Affordability: Lenders are always looking at your financial situation to determine how much they are willing to lend you. The way your income and expenses are reported in your accounts can make a significant difference in how much you can borrow. A mortgage broker can help you adjust or present your figures in a way that ensures you’re in the best position to qualify for a higher loan amount.
- Ensure Tax Efficiency: Working with your accountant and mortgage broker early means we can plan your accounts with a clear focus on both your tax and mortgage goals. It’s all about finding a balance. By understanding the interplay between tax efficiency and your mortgage application, we can help you structure your finances so you’re not leaving money on the table in either area.
- Avoid Surprises Down the Line: If you wait until after your accounts are finalised, there could be surprises when it comes to your mortgage eligibility. Small tweaks made early in the process could make a big difference in the outcome. By being proactive, you’ll have a clear understanding of where you stand and can take the necessary steps to improve your chances of securing the mortgage you need.
- Gain a Competitive Edge: With the housing market being as competitive as it is, being prepared in advance gives you an edge over other buyers. It gives you the confidence that when you find the right property, you’ll be able to move quickly, knowing that you’ve already taken the steps to position yourself for success.
Conclusion: Start Planning Early for a Smoother Mortgage Process
As a self-employed individual, you have a unique set of circumstances that can affect your mortgage application, but with the right preparation, it doesn’t have to be a complicated process. By reaching out to a mortgage broker before your accountant finalises your accounts, you’ll set yourself up for a smoother, more successful property purchase.
Don’t leave things to the last minute – getting ahead of the game now will give you the confidence and clarity to move forward when the time comes to buy. So, whether you’re just starting to think about buying a home or you’re already planning for the next year, let’s talk early to make sure you’re fully prepared.
Your home may be repossessed if you do not keep up repayments on your mortgage.
Emily Mays / Director