Self Employed Mortgage

Can I get a mortgage if I’m self-employed?

This is still a commonly asked question. The answer is a resounding YES. Gone are the days when the words self employed and mortgage seemed like a contradiction.

But Surely It’s Harder to Get a Mortgage if I am Self Employed

If you are self employed, it can be more of a challenge for sure. This is because you will need to prove you have a reliable income. But getting a mortgage is by no means out of the question. There are many ways that you can prove this to a potential lender. Okay, so you’ll probably be jumping through a few more hoops than employed homebuyers but after that it’s no different.

Am I Classed as Self Employed?

If you own more than 20% to 25% of a business, from which you earn your main income then a lender will call you self employed. You may be a sole trader, a company director or even a freelancer or contractor. A lender is looking to see that the income you receive is a consistent one. They need to know that you are capable of paying back the loan. You aren’t being penalised for being self employed. It’s good business sense. Just as you would have to prove your salary if you work for someone else. Of course it’s easier to produce some payslips over a batch of yearly accounts.

How do I Prove That I can Repay My Mortgage?

• Two or more years’ certified accounts
• SA302 forms or a tax year overview (from HMRC) for the past two or three years
• Evidence of upcoming contracts (if you’re a contractor)
• Evidence of dividend payments or retained profits (if you’re a company director)

It Might Be Difficult to Prove My Earnings

You may have just started working on a self-employed basis and therefore will not have two years worth of accounts to show a potential mortgage provider. This is certainly a stumbling block but don’t despair. There are other ways to prove an ongoing income. You have evidence of work into the following year for example. Bear in mind that all lenders have different criteria and where some might be willing to look at other forms of evidence, some may not.

Self Employed Mortgage Broker

This is where a mortgage broker comes in useful because they do all of that hard work for you. They find the best rates and the lenders that will consider your application.

What Sort of Mortgage Deal can I Expect to Get if I am Self-Employed?

There are great deals to be had at the moment and that goes for contractors, freelancers and sole traders. Working for yourself has its advantages and disadvantages but struggling to get a good mortgage deal shouldn’t be one of them. The key is to look around and speak to an advisor about which deals are best for you and your circumstances.