If you are employed then in simple terms, a mortgage lender takes your basic salary, any over time and works out the maximum that they can lend you irrespective as to how long you have been employed however when you are self-employed lenders are more cautious and have different rules.
Most lenders will require three years SA302 returns from HMRC and will look at your net profit I.E. the net amount used to calculate your tax liability; they will then times this amount and come up with a lending figure. The lender will also look at your income over the last three years and take an average which can have the effect of reducing down the amount of lending available.
All this said some lenders are beginning to show some signs of flexibility with some lenders taking the last two years income figures to work out a lending amount and one particular lender will take one year self-employed if the client has a good credit score.
Before you search the market contact an adviser at the mortgage shop for the latest schemes available.
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