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How long do you need to be a sole trader for? 


You’ll have to prove your annual income and history of trading to a lender.  


Since self-certification mortgages are a thing of the past, regulations are now in place to make borrowers prove their income and affordability. 


If you are a sole trader or a partnership, you’ll be required to have a minimum of 12 months trading history and prove this to lender by providing your yearly tax returns or accounts, regardless of how you submit this information. 


You may do your own accounts and file a self-assessment form, have a book keeper who provides the information for you to submit a self-assessment form, or have a qualified accountant who submits the self-assessment form for you. 


How is my affordability worked out? 


If you are a sole trader, then your affordability will be worked out from the ‘total income received’ figure on your SA302 form. If you’re using sole trader accounts, then it’s the ‘net profit’ or ‘drawings’ amount. 


If you are a partnership, it’s also the ‘total income received’ figure from the SA302 form, but if you’re using the partnership accounts then it’s your own share of the ‘net profit’ or ‘drawings’ figure. 


What do I need to consider? 


There are many factors to consider with a sole trader or partnership mortgage: 


Deposit: If you fall out of standard lending criteria, for example if you only have 12 months of accounts history, then your mortgage may require a higher deposit. 


Proof: You’ll usually be required to prove your last three years of trading history, but some lenders will consider two years or even 12 months in some circumstances. 


Adverse credit: If you’ve got adverse credit, whether you are a sole trader or partnership, then you still will have access to mortgages with some specialist lenders who lend to borrowers with poor credit. 


There are technically no such things as ‘sole trader mortgages’ or ‘partnership mortgages’, just certain products you may or may not be eligible for depending on if you are either a sole trader or a partnership. 


To navigate the number of products that may or may not be available to you, and access specialist products not available on the high street, it’s essential to talk to a specialist adviser. 


For advice on getting a sole trader mortgage or a partnership mortgage, speak to one of our expert advisers who will be able to help you with the next steps.