Mortgages for self-employed

Getting a mortgage when you are self-employed

Don’t let being self-employed hold you back from getting the perfect mortgage deal. There are more options available to you than you might think, and speaking to an expert can help you navigate through any limitations.

In the past, only specialist providers would consider lending to the self-employed. Whereas now, many are improving the way they consider this type of borrowing.

The key is being able to provide evidence of your finances. Lenders no longer view self-employed individuals as high-risk borrowers, as long as the financial picture is clear. This is where an experienced mortgage adviser can make a real difference. By working with a mortgage broker like us, you gain access to over 90 high street lenders, thousands of mortgage options, and a whopping 12,000 products.

Since self-employed income can be complex, seeking expert advice is essential. Our team can guide you through the process, ensuring that your accounts are up to date and that your financial records are clear and well-documented.

If you haven’t been self-employed for long and struggle to show a long history of accounts, don’t worry. Building up your savings and increasing your deposit can significantly expand your mortgage options.

To find out more about self-employed mortgages, contact the team on 03454 500200 or email hello@mortgagedecisions.com. We can help you find the right mortgage.

What counts as self-employed?

In the eyes of lenders, you are considered self-employed when you own more than 20% to 25% of a business that generates your primary income.

Sole traders, company directors, and contractors all fall under the self-employed category. It’s important to understand how lenders perceive your employment status to navigate the mortgage application process successfully.

Self-employed mortgage criteria

When you apply for a mortgage as a self-employed individual, lenders usually need the following:

  • ID: This could be a valid passport or another form of identification that confirms your identity.
  • Proof of address: Lenders typically require documents that verify your current address, such as utility bills or bank statements.
  • Bank details: You’ll need to share your bank account information so that the lender can assess your financial standing.

You may also need to provide these additional documents:

  • Two years’ evidence of regular income and account statements: Lenders want to see a track record of consistent income, so be prepared to provide financial records and account statements covering the past two years.
  • SA302 forms and tax-year overviews: These forms serve as proof of your income and tax payments for the previous three years.
  • Evidence of profits or dividends for business owners: If you own a business, lenders may request documentation to verify your profits or dividends.
  • Evidence of upcoming work or business contracts: If you work as a trader or contractor, it can be helpful to provide evidence of upcoming projects or contracts to showcase your ongoing income prospects.

Some lenders may require proof of accounts that have been certified by a registered accountant, highlighting the importance of professional financial documentation.

How to apply for a self-employed mortgage?

Applying for a Self employed mortgage is a straightforward process. Here’s what you can expect:

  1. Organise your financial documents: To kickstart your mortgage application, gather all necessary financial documents. This includes your business accounts, profit and loss statements, balance sheets, and tax returns for the past two to three years. Be sure to keep your personal financial records in order as well.
  2. Check your credit score: Before talking to lenders, check your credit score and review your credit report. A good credit score can lead to lower interest rates and lower monthly payments.
  3. Calculate affordability: Use our affordability calculator to determine how much you can comfortably afford to pay for a mortgage. Remember to factor in your current income, expenses, and any debts you are paying off.
  4. Save for a deposit: The deposit is usually between 5% and 20% of the total price of the property. Putting down a higher deposit can get you lower interest rates and monthly payments.
  5. Seek expert mortgage advice: Self employed mortgages are a little different from an employed mortgage application. Because of this, it’s a good idea to seek professional advice. They can provide tailored information and solutions based on your circumstances and help you choose the best mortgage product.
  6. Compare mortgage offers: Research and compare mortgage offers from different lenders. Consider factors such as interest rates, loan terms, and additional fees. A mortgage advisor can assist you in understanding the fine print and finding the most suitable option for you.
  7. Submit your mortgage application: After you’ve picked a lender, you can finally submit your application! Make sure you include all of the required documents and that all of the information is current and accurate to speed up the process. Leaving any documents out or submitting false information can cause the process to take longer.

Frequently asked questions

How will you be assessed as a self-employed mortgage applicant?

How many years do you have to be self-employed to get a mortgage?

How many times my salary can I borrow for a mortgage self-employed?

Can I get a mortgage if self-employed for 1 year?

Does being self-employed make it harder to get a mortgage?

Can I get a 95 mortgage if self-employed?

What do self-employed have to show for a mortgage?

Do self-employed people have to pay higher mortgage rates?

Can I get a joint mortgage with a self-employed worker?

How to improve your chances of being accepted for a mortgage when self-employed

Because we play by the book we want to tell you that…

Your home may be repossessed if you do not keep up repayments on your mortgage.
There may be a fee for mortgage advice. The actual amount you pay will depend upon your circumstances.
The fee is up to 1% but a typical fee is 0.3% of the amount borrowed.

Speak to our experts

With access to 1000s mortgages from over 90 high street lenders, we can help you find the right mortgage. Our five-star Google reviews back this up. Call us now and speak to a member of our experienced team.

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