By Timothy Tromp de Haas
Your business is doing well. You have more assignments, your profit has increased and there's work lined up for the coming months. But your annual figures from previous years still tell a different story. Do you have to wait until those better results have been visible for longer before applying for a mortgage?
A forecast can help show that you expect to match last year's good result this year. For example, you may already have secured enough assignments. That provides evidence that it wasn't just one good year. Whether that income can count towards your mortgage depends on the lender's assessment.
Was it a good year, or can you sustain this income?
Did your business make a higher profit last year? A lender may use a forecast to assess whether you're expected to achieve at least a similar result this year. This helps demonstrate that the positive trend is continuing and that last year's profit may provide a suitable basis for assessing your mortgage income.
What if the growth is happening this year?
You'll want to know whether that development can already be taken into account when assessing your mortgage income. Signed assignments can help substantiate expected turnover. Their duration, the agreements with clients and the costs involved also matter. Turnover is not the same as income.
Whether a lender accepts a higher income on that basis needs to be assessed separately. A forecast does not automatically entitle you to that.
What I'd like you to take away
Has your business recently started performing better, and do you want to buy a home? Feel free to discuss your plans with us, even if your annual figures aren't ready yet. We'll look at whether a forecast could help substantiate your income and what's needed. That way, you'll know early in your search what you can prepare with your accountant or bookkeeper.