Mortgages for Self-Employed
Under the “self-employed” mortgage umbrella, there are three main branches that you could fall under: sole trader, contractor and limited company/director. If you are a sole trader, your “profits” will be calculated during your mortgage application, based on your tax returns. As a director of a limited company, usually the total of your salary and dividends is used to work out your income to prove that you can make your monthly mortgage payments, and this works in the same way for a partnership too. There are also specialist lenders for contractors, where your contract history, the remainder of your contract and many other factors are assessed. Specialist lenders will also take into account your company’s profit, rather than your income, in certain circumstances. The most important thing, if you’re looking to move home, buy your first home or buy to let as a self-employed worker, is to consult a professional first to ensure you are getting the most suitable deal possible for your situation.
After speaking to one of our self employed specialist mortgage brokers, we will get to know your situation and discuss what the best options for you are.
Upon receiving your Decision in Principal, we will work with you to get all of the paperwork together. We can even talk directly to your accountant.
Before you know it, you’ll be ready to move in to your new place with your mortgage secured and our tailored advice to you will continue.
Your Accounts
When it comes to the accounts you have to provide as a self-employed individual, there’s no clear answer as to how many years you need. This is dependent on your situation and even the lender you choose. Generally speaking though, two years' worth of accounts will secure you the best mortgage deal.
Similarly, the amount of time you need to have been trading as self-employed will depend on the requirements of the lender, so it’s always best to double-check with a specialist mortgage broker before you begin applying for your mortgage.
Your Deposit
Regardless of what you’ve heard, securing a mortgage if you’re self-employed is not much different to being employed, aside from the income documents that you have to provide. When it comes to your deposit, we recommend having between 5-20% of the purchase price, irrespective of your employment status - the more deposit you have, the cheaper the interest rate!
As well as increasing the chance you have of being accepted by a lender, generally the more money you put in, the better the mortgage deal we will be able to secure for you.
