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MortgageOS
Preparation Guide

The 12-Month Mortgage Countdown

Month-by-month checklist for self-employed buyers preparing for a mortgage application. From tax year planning to credit optimization to document assembly.

Updated January 202615 min read

Why Start 12 Months Early?

When you're self-employed, getting a mortgage isn't just about finding a property and applying. Lenders assess your income based on historical financial records — typically your last 2-3 years of accounts or tax returns. This means the decisions you make about tax efficiency, profit extraction, and expense claims in the months before you apply will directly determine how much you can borrow.

The critical insight

Your borrowing capacity is largely determined 6-18 months before you apply, not when you submit your application. Starting early gives you the power to influence these figures.

Starting 12 months ahead allows you to:

  • Influence your tax year figures — choose between tax efficiency and mortgage-maximizing strategies
  • Improve your credit profile — credit scores take months to reflect positive changes
  • Build your deposit — with documented, traceable funds
  • Gather documentation — within lenders' validity windows
  • Find the right lender — one whose criteria match your income profile

Month-by-Month Timeline

This timeline works backwards from your target application date. If you're planning to apply in January 2027, month 12 would be January 2026. Adjust according to your own timeline.

12

Month

Strategic Planning

  • Review your current business structure (sole trader vs limited company)high
  • Calculate your assessable income under different lender methodshigh
  • Set a target property budget based on realistic borrowing estimatesmedium
  • Check your credit report with all three bureaus (Experian, Equifax, TransUnion)high
  • Identify any credit issues that need addressingmedium
11

Month

Credit Optimization Begins

  • Reduce credit card utilisation to below 30%high
  • Register on the electoral roll if not alreadyhigh
  • Stop applying for new credithigh
  • Set up direct debits for all regular paymentsmedium
  • Close any unused credit accounts (but keep oldest ones open)low
10

Month

Financial Housekeeping

  • Open a dedicated savings account for your deposithigh
  • Set up regular automated deposits into savingsmedium
  • Review and reduce unnecessary subscriptionslow
  • Cancel any gambling accounts (lenders flag these)high
  • Ensure bank statements show stable, regular incomemedium
9

Month

Tax Year Planning

  • Meet with your accountant to discuss mortgage-optimal tax strategyhigh
  • Decide on dividend extraction strategy (if Ltd company)high
  • Review expense claims - consider impact on assessable incomemedium
  • Plan profit retention vs extractionmedium
  • Document any one-off expenses that reduced profitlow
8

Month

Income Maximization

  • Chase any outstanding invoices before tax year endhigh
  • Defer unnecessary expenses to next tax year if possiblemedium
  • For contractors: ensure continuous contract coverage where possiblehigh
  • Document any contract extensions or renewalsmedium
  • Keep records of any pay rises or rate increaseslow
7

Month

Deposit Building

  • Review deposit progress - on track for target LTV?high
  • Consider gifted deposit conversations with familymedium
  • Document source of any large depositshigh
  • Avoid moving money between accounts unnecessarilymedium
  • Keep savings in accounts that can provide clear statementsmedium
6

Month

Document Preparation Phase 1

  • Gather previous 2-3 years of SA302s from HMRChigh
  • Collect corresponding tax year overviewshigh
  • Request certified accounts from your accountanthigh
  • Organize bank statements (business and personal)medium
  • Compile proof of business address and trading historymedium
5

Month

Credit Check Review

  • Review credit score progresshigh
  • Check for any errors on credit reports and dispute if neededhigh
  • Verify all addresses are correctly linkedmedium
  • Ensure no new negative markers have appearedhigh
  • Confirm credit utilisation is optimalmedium
4

Month

Broker Research

  • Research mortgage brokers with self-employed expertisehigh
  • Prepare questions about lender criteria for your situationmedium
  • Understand broker fees and servicesmedium
  • Check broker reviews and FCA registrationmedium
  • Shortlist 2-3 brokers to speak withlow
3

Month

Professional Advice

  • Initial consultation with mortgage brokerhigh
  • Get preliminary assessment of borrowing capacityhigh
  • Understand which lenders suit your income profilehigh
  • Identify any gaps in documentationmedium
  • Create action plan for remaining preparationmedium
2

Month

Final Document Assembly

  • Compile complete document package per broker requirementshigh
  • Obtain latest bank statements (3-6 months)high
  • Get updated company accounts if relevanthigh
  • Prepare ID and proof of address documentsmedium
  • Write explanation letters for any unusual transactionsmedium
1

Month

Application Ready

  • Final credit check to ensure score is optimalhigh
  • Confirm all documents are within validity periodshigh
  • Ensure deposit is accessible and source documentedhigh
  • Begin property search in earnesthigh
  • Submit Agreement in Principle applicationhigh

Tax year alignment

The UK tax year runs from 6 April to 5 April. If your target application date falls soon after a tax year end, you'll need to coordinate your preparation with your accountant's filing schedule.

Master Checklist

Use this interactive checklist to track your overall progress. Your progress is saved automatically in your browser.

Mortgage Preparation Progress

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Common Mistakes to Avoid

Being too tax efficient

Claiming every possible expense minimizes your tax bill but also reduces your assessable income. A £10,000 expense claim might save £2,000-4,000 in tax but could reduce your borrowing capacity by £40,000-50,000.

Waiting until you find a property

By the time you find your dream home, your financial situation is already fixed. The figures in last year's accounts can't be changed. Starting the process before property hunting gives you maximum flexibility.

Not checking credit until late

Credit issues take months to resolve. Unknown defaults, incorrect addresses, or high utilisation discovered at application time can derail the entire process. Check early, check often.

Using a generalist broker

Self-employed income assessment is complex. A broker who mostly handles employed applicants may not know which lenders offer the best treatment for your specific business structure and income type.

Check your current readiness

See which lenders would approve you today and what you can do to improve your position.

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Frequently asked questions