Mortgages for the Self Employed
You are considered self-employed if you own more than 20-25% of a business from which you earn your main income.
As a self-employed worker, getting a mortgage or remortgaging with some of the main high-street lenders can be challenging but it is doable. This is because you are seen as a riskier borrower, with a less reliable income. As a mortgage broker with access to a comprehensive panel of lenders, we can look at high street lenders and the more specialist ones, depending on your needs.
In fact, the self employed mortgages for which you’ll be eligible are actually just conventional mortgages but you’ll be expected to jump through more hoops to demonstrate your financial eligibility.
To be approved for a self-employed mortgage, you will need to provide evidence of your income. This typically includes two or more years of certified accounts, evidence of upcoming contracts (if you are a contractor), evidence of dividend payments or retained profits, and recent SA302 forms, tax return, or your tax year overview from HMRC. You will also need to provide bank statements and have a good credit score
Here are some additional tips for self-employed borrowers:
- Start your application early. This will give you more time to gather the necessary documentation and improve your chances of approval.
- Get pre-approved for a mortgage before you start looking at properties. This will give you an idea of how much you can borrow and what your monthly payments will be.
- Be prepared to negotiate. Don’t be afraid to haggle with the lender to get the best possible deal.
With careful planning and preparation, you can successfully get a mortgage or remortgage as a self-employed borrower.