How do I prove my income?
Going back a little over a decade, lenders used to offer what were known as “self-certification” (or “self-cert”) mortgages. With a self-cert mortgage, the applicant made a declaration of their income, and this did not have to be backed up by documentary evidence. When the financial crisis came and lenders started tightening up their lending criteria, self-cert mortgages were one of the first things to go. In the years since, the Financial Conduct Authority – which regulates mortgage lending in the UK – set rules that mean mortgage lenders must obtain evidence of income, and apply appropriate affordability checks before lending.
As a self-employed taxi driver, you do not have the luxury of just providing pay slips to the lender to prove your income. Instead, they will normally ask to see your business accounts. Many lenders need to see three years’ worth of accounts to evaluate your income sustainability; however, there are some lenders out there who are willing to base their lending decisions on two year’s or as little as one year’s accounts. Normally, lenders require accounts to have been prepared or certified by a chartered accountant.