Which annual figures do I need for a mortgage?

The short answer

The lender or income assessor determines the requirements. Collect final annual figures, tax returns and, if necessary, current figures.

Basis: art. 2:362 DCC; current NHG assessment frameworks for the Inkomensverklaring Ondernemer (income statement for entrepreneurs)

How does a lender assess an entrepreneur's income?

For a mortgage for entrepreneurs, the assessment concerns a stable income. The annual accounts are one source for that, but not always the only document. Ask the mortgage adviser which route applies to your legal form and lender. A public publication balance sheet often contains too little data to assess your income properly.

For an entrepreneur's income, NHG uses the Inkomensverklaring Ondernemer (income statement for entrepreneurs) and publishes assessment frameworks and information on accepted calculation experts for it. The assessment may cover several years and additional current information. Take the assessor's current list of documents as your starting point, rather than a general undated list from the internet. A sole proprietorship involves different data from a DGA (director-major shareholder) with a holding and operating company. State changes in legal form, takeovers and periods in employment. The assessor must be able to understand which income is comparable and which development results from a changed structure.

Which final annual figures do you collect?

Collect the final annual figures and the related tax returns in recognisable files. Check that names, periods and results reconcile or explain differences. A taxable profit may differ from the commercial result. For a DGA, salary information may be relevant in addition to the results and financial position of the BV. Do not equate a dividend distribution with sustainable income without assessment. Ask in good time whether figures of other group companies are needed. By answering that question in advance, you prevent the mortgage application from stalling because only the personal holding reporting was supplied.

Make clear which information is final and which provisional. An interim overview of the current year can be useful, but it is not adopted annual accounts. Explain large one-off income, incidental costs and recent turnover changes factually. Do not use an adjusted 'pretty' set of annual accounts in which unfavourable items are left out. Art. 2:362 DCC remains the starting point for a reliable financial picture for a BV. An income assessor may apply corrections or normalisations according to its own rules. That assessment must remain separate from the original report and the underlying records.

What do you do with provisional figures?

Plan the year-end work well before the desired moment of financing and coordinate the accountant support needed. Not every mortgage application asks for the same accountant product; have the adviser make that concrete before you order extra work. An income statement is moreover not a commitment that the mortgage will be granted. The lender assesses the whole file. Keep the documents supplied and respond specifically to additional questions. The practical preparation consists of complete, mutually explainable figures and a clear explanation of your business. That is more useful than having a formal-looking pdf made just before the financing condition expires.

Sources

• NHG (Dutch national mortgage guarantee): a mortgage for entrepreneurs

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