how to present accounts for mortgage application

[jayzee]

Hi everyone,
found your forum while looking for information so thought I would ask and see if anyone can help out.

I have been envolved in a small business now for a few years but my business partner was always in charge of the accounts. the partner has now departed, not on the best of terms so I am now looking after the accounts myself.

I am at the stage where I now want to apply for a mortgage for a house and from reading about have worked out that I have a couple of options.

1. self certified mortgage - no need to give any proof of income
2. have an accountant have a look at my accounts and sign everything off.

currently my accounts don't seem to be the prettiest to look at although I have everything that is needed I think (receipts, invoices, bank statments and a simple cashbook style accounts setup within an excell document) but I am unsure of how I should present these accounts for the accountant/mortgage.


from what I have read I will get a better interest rate if I go for the option of letting an accountant look over my accounts.

I have not used an accountant before so am a little unsure of how to go about this and am not wanting to spend alot of money on them presenting my accounts for the mortgage application unless I really need to.

thanks

Jay

[Joyous]

Hi Jayzee

It’s really not that expensive to get a set of accounts drawn up by an accountant. Probably less than the annual interest saving on your prospective mortgage.

Provided you’ve kept a decent set of books throughout the year then I charge from £300 + VAT for a set of sole trader accounts. Of course if your books are shocking or you use the “carrier bag method” of bookkeeping be prepared to pay considerable more.

For sole trader accounts and self assessment return I charge from £499 + VAT.

Do get in contact if I can be of help.

Regards

Joy

[Safi]

He JAy
I am safi from Pakistan,. I am a student of MBA-Finance. what kind of help do you want about mortgages, can you explain me in detail so that i would be able to solve your problem if it is not being solved yetn
with regards
safi

[jayzee]

well, I have all my accounts in a simple cashbook format in excell, I have a work sheet for incoming and one for outgoing for each year.

this is then split up into months and has the totals at the bottom showing how much for that financial year was spent on motor/travel, communications, advertising drawings etc and then again for the incomming money.

I have all my bank statments, invoices and receipts to go with this cashbook but this I had to recompile as it turned out my partner wasn't doing a particularly good job of looking after the accounts.

I want to know what information from this would be needed and how an accountant would want to see this information to be able to confirm to a mortgage company that it was ok.

I assume I need to provide some sort of review document for each end of year that basically reviews the information in the cash book which is backed up by the receipts, invoices and bank statments.

if I need something like this what should it look like. I want to make it as easy as possible to let an accountant view my accounts and verify them.

as i said before My partner looked after the accounts and did all the filling in of the tax returns so I am unsure of exactly how he came to his figures. but when it turned out he hadn't done the VAT return properly and they came and did an inspection, I had to work through everything and produce it in my own way from what he had left me to give them the figures they needed to look at. they just used a rolling cashbook of all the years, bank statments, invoices and receipts and this seemed to be good enough, but i am thinking things will be slighlty diferent with a mortgage application as you are trying to prove income over a year.


any help you can provide will be much appreciated.

Jay

[Joyous]

Originally Posted by jayzee

if I need something like this what should it look like. I want to make it as easy as possible to let an accountant view my accounts and verify them.

Assuming that you're not a limited company you need to produce something that looks like this or this. A mortgage lender is unlikely to have the patience to look through the underlying documentation.

You sound as if you've more or less cracked it in terms of the bookkeeping so I'd suggest you just take everything to an accountant and get him to draw you up some accounts.

Regards

Joy

[gaz2373]

Hi there
You don't necessarly have to get a full set of accounts drawn up as some lenders will work from a form that they provide where an accountant has to sign to verify your income.
If your accountant is confident with a draft set of accounts you should ask your mortgage broker to see if the lender concerned has such a form.

Any problems with your mortgage let me know.