On this very brief blog post, we will cover accountant certificates when looking to get a mortgage.

Accountant certificate for a mortgage

When looking to certify your income as a self-employed borrower, most mortgage lenders will request an accountant certificate before the offer you a mortgage.

If the accountant does not possess the right qualifications then the accountant certificate for a mortgage may be rejected by the mortgage lender.

Below we have listed the different accounting bodies and the qualifications accepted.

Before getting an accountant certificate for a mortgage you should check with your mortgage broker or mortgage lender to be sure the accountant certificate will be accepted from a particular accountant before incurring any costs getting it.

Institute of Chartered Accountants in England & Wales -A.C.AF.C.A

Institute of Chartered Accountants of Scotland -C.A (Chartered Accountant) A.C.A.SF.C.A.S

Institute of Chartered Accountants in Ireland, also known as Chartered Accountants Ireland -C.A (Chartered Accountant)

Association of Chartered Certified Accountants Association of Authorised Public Accountants -A.C.C.AF.C.C.AA.A.P.AF.A.P.A

Association of Chartered Certified Accountants Association of Authorised Public Accountants -A.C.C.AF.C.C.AA.A.P.AF.A.P.A

Institute of Financial Accountants -A.F.A (Associate) F.F.A (Fellow)

Chartered Institute of Taxation -C.T.A (Fellow)F.T.I.I (Fellow)C.T.A A.T.I.I

Chartered Institute of Public Finance & Accountancy -C.P.F.A.

Chartered Institute of Management Accountants -A.C.M.AF.C.M.A

Certified Public Accountants Association -A.C.P.AF.C.P.A

Association of Accounting Technicians -M.A.A.TF.M.A.A.T

Association of International Accountants -A.A.I.AF.A.I.A [not FAIA (acad)]

A sample of an accountant certificate for a mortgage

Below is a sample of an accountant certificate for a mortgage. These are the questions your accountant will need to answer.

“To confirm income for all self-employed applicants

Please note Section A&F to be completed for all Clients.

Section A of the accountant certificate for mortgage

– as the Mortgage Applicant’s Accountant please clarify the following details – to be completed for all Clients.

Customer name (your Client): Name of Business: Nature of Business: Business Address: Has your client traded continuously for the last 12 months? Yes/No

Business Commencement/Incorporation Date (DD/MM/YYYY): / /

How long have you acted for your client? Clients NI: Tax Office and Reference Number:

Please note: We require information from the last two years’ trading accounts and will only accept income declared in the UK for tax purposes. If you cannot provide two years’ figures, please provide a reason.

Section B of the accountant certificate for mortgage

– for Sole Trading Self-Employed Applicants (please complete all boxes).

Dates of Financial Year Ends (DD/MM/YYYY)

Annual Turnover

(from Ordinary Trading Activities)

Gross Profit (Loss)

Net Profit (Loss)

Balance of Capital Account

Section C of the accountant certificate for mortgage

– for Self Employed Partners of Partnership Business (please complete all boxes).

Share of profits: %

Dates of Financial Year Ends (DD/MM/YYYY)

Annual Turnover

(from Ordinary Trading Activities)

Gross Profit (Loss)

Client’s Share of net deliverable profits (Loss)

Balance of Capital Account

Section D of the accountant certificate for mortgage

– for Self-employed Partners of LLP Partnership (please complete all boxes).

Member Stake: %

Dates of Financial Year Ends (DD/MM/YYYY)

Annual Turnover

(from Ordinary Trading Activities)

Gross Profit (Loss)

Profit (Loss) for the financial year available for discretionary division amongst its members

Client’s Share of Profit

Closing balance of Client’s Capital account as at Financial Year End

Section E of the accountant certificate for mortgage

– for Limited Company Directors (20% or more shareholding) (please complete all boxes).

Registered Number of Company:

% of Client’s Shareholding: %

Dates of Financial Year Ends (DD/MM/YYYY)

Annual Turnover (from Ordinary Trading Activities)

Gross Profit (Loss)

Profit (Loss) for the financial year after interest and tax

Total Shareholder’s Funds

Client Salary

Client Dividend

Total Client Remuneration

Section F of the accountant certificate for mortgage

– to be completed in all cases.

Have these figures been agreed with HMRC? Yes/No

Please give your opinion whether the business is financially sound, and state any qualification to the accounts or comment generally on any substantial variation in the figures provided:

I confirm that the above figures provide a true and accurate summary of my client’s income. I confirm that to the best of my knowledge there have been no adverse material changes to the business to date. (Please tick box)

Accountant details: Qualifications: Name: Company:

Signature: Date: / / “

 

Use a Government scheme

 

Government schemes help you reduce the amount of mortgage deposit you may need to put down, reduce the price of the property or create a structure that increases your mortgage affordability much sooner than it would have been.

Some of these include first-time buyer government schemes whilst others in this list are accessible to you even if you are not a first-time buyer.

Government schemes are not available to you if you are getting a buy to let mortgage.

The Government schemes include:

  • Lifetime ISA– gives you a government bonus of £1,000 if you save a maximum £4,000 a year.
  • Help to buy ISA– gives a maximum bonus us £3,000 if you save the maximum allowed of £12,000. Before you get either you should consider which is better. Lifetime ISA vs Help to buy ISA.
  • Help to buy equity loan– gives you up to 40% as a 5-year interest-free equity loan. You begin to pay interest at 1.75 % after the fifth year and 1% plus RPI for every year thereafter.
  • Shared ownership– You can buy between 25% to 75% of the property initially with a shared ownership mortgage and then buy more using a staircasing mortgage.
  • Armed forces help to buy– similar to the help to buy equity loan but specific for the armed forces personnel giving them an increased chance of acceptance.
  • Rent to buy– This is the right to buy scheme on which this guide is currently discussing. A different marketing name is just used. Watch out for this when shopping to avoid missing out on eligible properties due to confusion.
  • Right to buy– allows you to buy your home at a discount price.
  • Preserved right to buy– same as above.
  • Right to acquire– similar to the above.

 

Depending on where you live, you may also be able to take advantage of home buying schemes provided by your local council. Example: In Norwich, the local councils provide the Norwich home options scheme.

Use a mortgage broker for your mortgage in principle

You may want to use an independent mortgage broker to help you get a mortgage on your new home.

Mortgage brokers are important as they can access mortgage products from across the whole of the market in some cases.

This could be over 11,000 mortgage products. This may have some advantages rather than going directly to a mortgage lender.

A mortgage broker will look to understand your financial circumstances and then provide recommendations on which mortgage products may be suitable for you based on your mortgage affordability.

After giving you these mortgage recommendations, most mortgage brokers will seek your consent to apply for a mortgage in principle

This will allow you to shop for your home as more estate agents and sellers may take you seriously and it will also give you confidence that your mortgage is indeed a possibility before you make a full mortgage application. 

Once you have found a home you want to buy and are satisfied with the mortgage offer for your mortgage then the mortgage broker will then look to get you a mortgage offer.

This will come with a key facts illustration document that details the features of your mortgage including how much you will pay per month.

 

It will also contain information on if there are any limits such as early repayment fees, or annual overpayment limits.

If you are happy with everything you can then go on to secure your mortgage with the help of a conveyancer.

Your conveyancer will manage the legal searches on the property to ensure there aren’t any issues with it.

They will oversee the sales agreement to ensure it is in your best interest, they will manage the transfer of mortgage funds, exchange contracts with the seller or their conveyancer, and set a completion date with the seller or their conveyancer.

 

This will then bring an end to the conveyancing process, at which point you will receive the keys to the house and move in.

 

If you need financial advice and you live in the UK then you could contact the Money Advice service over the phone or via chat for impartial advice.

You can also contact the debt charity “Step Change” if you are in debt and need help.

John has 22 years of experience in financial services. This spans across financial research, financial services (As a qualified mortgage broker and underwriter), financial trading and sales at global investment banks. While working as a publishing research analyst, he covered European bank credit and advised institutional clients on investment strategies at both JP Morgan and Societe Generale. John has passed all three levels of the CFA (Chartered Financial Analyst) programme.

John has 22 years of experience in financial services. This spans across financial research, financial services (As a qualified mortgage broker and underwriter), financial trading and sales at global investment banks. While working as a publishing research analyst, he covered European bank credit and advised institutional clients on investment strategies at both JP Morgan and Societe Generale. John has passed all three levels of the CFA (Chartered Financial Analyst) programme.