Lenders are increasingly adopting a standard process to verify income on self-employed mortgage applications ahead of the mortgage market review.
Lenders have typically required self-employed borrowers to submit accounts proving 12 months’ income, which had to be signed off by an accountant.
But over recent weeks, lenders have started requesting a standard HM Revenue & Customs form instead – the self-assessment tax calculation, or SA032, form.
Lloyds Banking Group, including its Halifax and BM Solutions brands, NatWest, Principality Building Society, Nationwide and Woolwich have all decided to use the HMRC form when assessing whether self-employed applicants can afford the mortgage.
Perception Finance managing director David Sheppard says: “I would back using the SA302 form over any other form of income verification for the simple reason that HMRC has details of what people have earned.
“By tallying up with HMRC, there is no scope for borrowers to ly about what they have earned.”