What Are Complex Income Mortgages?
Complex income mortgages are tailored for individuals whose earnings come from non-traditional sources. Unlike those with regular salaries, complex income applicants may include:
• Contractors with short-term or rolling contracts.
• Self-employed individuals with limited trading history.
• Company directors with fluctuating salaries and dividends.
• Investors relying on rental or investment income.
Lenders consider your overall income patterns and financial stability, rather than just a fixed salary.
Mortgages for Self-Employed Individuals with One Year of Accounts
Securing a mortgage with just one year of accounts is possible, but it requires careful preparation. While many lenders prefer two or three years of financial history, some specialist lenders may consider your application with only one year of accounts if:
• Your Business is Performing Well: Your most recent accounts show strong profits and financial stability.
• You Provide Clear Documentation:
• SA302 forms and tax year overviews.
• Bank statements demonstrating steady cash flow.
• Professionally certified accounts for added credibility.
Mortgages for Contractors
If you work as a contractor, lenders assess your income in a different way. Instead of reviewing payslips, they use your contract rate to estimate your annual earnings. For example:
• Multiply your daily rate by the number of working days in a year (typically 240–260).
• This figure is then used to determine how much you can borrow.
Specialist lenders recognise the flexible nature of contractor work and provide mortgage options tailored to your needs.
Essential Features of Complex Income Mortgages
How Lenders Assess Your Income:
• Self-Employed: Net profits or salary/dividends for company directors.
• Contractors: Annualised contract rate.
• Investors: Rental income or investment earnings, supported by relevant documents.
Deposit Requirements:
Larger deposits of 15%–25% are often required. A higher deposit may also help secure better interest rates.
Required Documents:
• Tax returns and SA302 forms.
• Bank statements for both personal and business accounts.
• Certified accounts and copies of contracts.
Specialist Lenders:
Some lenders specialise in working with applicants with complex income, making it easier to find a deal that suits your situation.
How to Secure a Complex Income Mortgage
1. Prepare Your Finances:
• Check your credit score and correct any errors.
• Reduce outstanding debts to improve affordability.
• Save for a larger deposit, if possible.
2. Gather Documents:
• Sole Traders: Tax returns and bank statements.
• Contractors: Contracts and payment history.
• Company Directors: Certified accounts and dividend details.
3. Work with a Specialist Broker:
Brokers can connect you with lenders who are familiar with your income type.
4. Apply for Pre-Approval:
Obtain a Decision in Principle to determine how much you can borrow.
5. Submit Your Mortgage Application:
Provide all required documents. Specialist lenders often streamline the application process.
Advice for Securing a Mortgage with Complex Income
• Save a Larger Deposit:
A larger deposit lowers lender risk and may help secure a better interest rate.
• Plan Your Timing:
Apply after a strong financial year to increase your chances of approval.
• Use a Specialist Broker:
Brokers can connect you with lenders who are experienced in handling complex income situations.
• Build Your Credit Profile:
Pay bills on time, register on the electoral roll, and manage your debts responsibly.
Advantages of Complex Income Mortgages
• Tailored Solutions:
Lenders take your unique income situation into account.
• Homeownership Access:
Contractors and self-employed individuals can achieve their property goals.
• Flexible Criteria:
Specialist lenders cater to non-traditional income sources, such as rental or investment income.
• Better Rates with Preparation:
Strong documentation and a larger deposit can help secure more favourable terms.
FAQs About Complex Income Mortgages
Can I get a mortgage with only one year’s accounts?
Yes, some lenders accept this if your accounts show good financial health.
How do contractors prove income?
Contractors can use their contract rate, annualised to estimate gross income.
Are interest rates higher for complex income mortgages?
Rates may be slightly higher, but good preparation can help secure better deals.
Can rental income be included?
Yes, rental income is often considered if supported by reliable documents.
Do I need an accountant?
Using a certified accountant isn’t mandatory, but it strengthens your application.
Why Choose Compare the Mortgage?
At The Landlords Broker, we specialise in helping people with complex income secure mortgages. Here’s how we help:
Expert Guidance
Personalised advice for contractors, self-employed individuals, and investors..
Wide Network
Connect with specialist lenders who are experienced with non-traditional income.
Simplified Process
Assistance at every stage, from pre-approval to completion.
Competitive Rates
We assist you in finding the best mortgage deals on the market.
Start Your Journey Today
Ready to explore your mortgage options? Contact Compare the Mortgage today for personalised advice on mortgages for contractors, self-employed individuals with one year of accounts, or those with complex income. Let us help turn your property dream into reality.