Self Employed Mortgages

“If I am self-employed, can I get a mortgage?”
The simple answer to that question is YES.

If there is one thing that is brandished around a lot, it’s a myth that it’s now almost impossible to get a mortgage if you are self-employed and want to purchase a home. While it is true that it can be a little more challenging than normal in certain situations, this is something that can be managed if you have the right people on side.

Who offers Self Employed Mortgages?

Now we have established that being self-employed doesn’t take you out of the mortgage market; you are probably left wondering which lenders offer self-employed mortgages.

While you may think that the bigger lenders don’t offer mortgages for self employed people, you would, in fact, be wrong. When it comes to mainstream lenders, they will have different criteria and requirements from you to qualify for one of their mortgages.

Some lenders out there will require one year of your full accounts so that they can prove your income, other lenders may request up to three years. Lenders will also want to look closely at your profit margins on a year to year basis, as well as other criteria that often comes into account.

This specific detail will vary between lenders and speaking to a mortgage broker with experience will often be the best thing you can do. In this situation, a mortgage broker will already have dealt with many of the lenders and will know their requirements, thus reducing enquiry time for you.

When it comes to preparing for a self-employed mortgage, having an idea of what they will ask for is always helpful.

  • Up to 2- 3 year’s worth of account information. However, there are some lenders that will consider applications with just 1 years of trading.
  • 3 – 6 months of business bank statements. While some lenders may only ask for three, having six months will always be best practice.
  • Three years of SA302 tax forms will also be required.

(Please note – this is not all the documents you will need for a full mortgage application).
Please refer to our full guide here.

How Much Can You Borrow with a Self Employed Mortgage?

This is the most commonly asked question among people who are applying for mortgages when self-employed but unfortunately, the answer is not as straightforward as people think.

There used to be a time where the amount you could borrow was calculated on how much you earned and multiplied by around four. Nowadays, the process is more in-depth. Lenders will now consider income patterns, affordability, spending habits and monthly outgoings – particularly those that won’t change when you move.

As a self-employed person, lenders will also want information on past and future contracts as well as looking at your payment growth and projected plan over the years.

If you are self-employed and you are looking for a mortgage, contact one of our team today on 01202313182 or request a callback and one of our experts will be in touch.

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