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The maximum LTI (loan to income) limit where the primary borrower is self employed is 4.49x the total income.
We will accept and class a self employed borrower as someone who receives income from;
- Sole trading
- LLP or Limited Companies (shareholding of 20% and above)
- Rental Income
- Investment Income
As standard we require proof of 2 years worth of trading for all self-employed applicants.
For joint applications, where one of the borrowers has been trading for a minimum of one year and the majority of the total income on the application is coming from Employed or longer trading Self-employed borrowers, we may proceed subject to full Underwriter assessment.
For all Self Employed applicants we will require the latest 3 months bank statements showing trading (Business or personal) to ensure that current earned income is consistent with that of the latest accounts/self-assessment. Where the trading has reduced we will reduce the income accordingly.
If your customers' recent trading has been impacted by the Covid or any other reason please provide us with full details. We may ask for additional documents to ensure income used is sustainable.
We will take the latest year's income for the affordability assessment where the income is deemed to be sustainable. Where there have been large increases or decreases in the year on year profit/income, please provide us with full details.
If the applicant has a shareholding of less than 50%, we would accept Dividends and Directors Salary for the affordability assessment. We will check the NET profit for the company to ensure that the applicants income is sustainable.
If the applicant has a shareholding of 50% or more, we would use Director's salary and Share of NET profit for the affordability assessment. We will check the NET profit for the company to ensure that the applicants income is sustainable.
We will not accept Dividends where the applicant’s drawings exceed the NET profit of the business for the latest year. Where the Dividends exceed the Net profit, we will only accept the share of the Net profit for our affordability calculations.
Please refer to our packaging guide for document requirements.
Acceptable Accountants Qualifications
Institute of Chartered Accountants in England & Wales – A.C.A or F.C.A
Institute of Chartered Accountants of Scotland – C.A (Chartered Accountant), A.C.A.S or F.C.A.S
Institute of Chartered Accountants in Ireland, also known as Chartered Accountants Ireland – C.A (Chartered Accountant)
Association of Chartered Certified Accountants – A.C.C.A, F.C.C.A, A.A.P.A or F.A.P.A
Association of Authorised Public Accountants – A.C.C.A, F.C.C.A, A.A.P.A or F.A.P.A