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New Improved Self Employed terms from Tipton

07 April 2017

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Tipton have now reduced the requirement  to assess self-employed income against 3 year track record.  As a consequence of this amendment the following underwriting changes take immediate effect: 

  • Minimum 2 years self-employed history
  • Limited Companies – Customer affordability is assessed against their latest two years income figures underwritten against 100% of salary and dividend. (A percentage of retained profit may also be considered in some circumstances, please refer accounts for full consideration).
  • Sole Trader - affordability is assessed against an average of their last two years net profit (SA302’s with associated tax year overview required to support application).
  • A current years projection (from a suitably qualified accountant) may also be considered as part of their underwriting assessment  subject to the following conditions:
  •       -  2 years previous accounts available
  •       -  Accountant projection for current year is based on minimum 6 months YTD management accounts
  •       -  Income is calculated against the average of two full years account and the current year end projection
  • A three year average may also be applied to offset a reduction – cases considered on individual basis and subject to a satisfactory explanation as to the reason for any decline and a accountants projection

Example 1 (Incorporating a projection)

Customers’ income last two years confirmed as £20,000 (2015), £25,000 (2016), accountant’s projection for the current year end, based on 6 months management accounts is £30,000. Income for mortgage purposes is £75,000/3 = £25,000 

Example 2 (One off reduction)

Customer has been trading for number of years, income history £55,000 (2014), £35,000 (2015), £55,000 (2016). Accountant provided satisfactory explanation as to the decline in 2015 and confirmed current income levels were sustainable. Income for mortgage purposes calculated against a 3 year average £145,000/3 = £48,000

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