Can I Get A Mortgage If I’m Self Employed?
If you’re self-employed and confused as to whether you can get a mortgage or not, this blog should clear a couple of things up.
The great news is that you can get a mortgage if you’re self-employed. However, mortgage lenders may sometime have stricter criteria. It certainly isn’t impossible though – let’s take a look at the details.
Self Employed Mortgage Rules
Getting a mortgage can be stressful for most people, especially first-time buyers. Add in the self-employed element and you might be tempted to think it’s an impossible task.
There is no need to despair though – you absolutely can get a mortgage when you’re self-employed.
Lenders need to see proof that your income is reliable enough to meet their monthly repayments. Sometimes they do this by asking for additional information such as business/company bank statements or even a reference from your accountant.
How Do I Prove My Income Is Reliable?
Everyone must prove their income when applying for a mortgage, when you are self-employed you need to take a few extra steps to show your income is reliable. You can do this by providing:
- 3+ years of certified accounts
- SA302 forms or a tax year overview (from HMRC) for the past 3 years
- Evidence of dividend payments or retained profits – if you’re a company director
- Evidence of future work or contracts
- Depending on your circumstances you may need to provide additional documentation.
It is also worth noting that lenders prefer to see accounts that have been prepared by a qualified accountant as this adds a further layer of credibility.
How Do I Get A Mortgage If I’m Newly Self Employed?
There is no denying obtaining a mortgage may be a little trickier if you are recently self-employed. If you only have a year or less of accounts, it will be difficult to prove you have a reliable source of income or for a lender to work out how much you have coming in on average.
It isn’t impossible though so please contact Burnett Mortgages for help!
Will My Mortgage Be Different Because I’m Self Employed?
No, as mentioned self-employed people apply for the same products and deals that everyone else does.
You will not be charged any more interest or given a different product because you are self-employed.
Mortgage Tips For The Self-Employed
If you are self-employed and wondering where to start, how much you may be able to borrow, or if indeed you stand a chance of being accepted for a mortgage, the first thing to do is speak to a mortgage advisor or broker.
A broker will have access to lenders not available on the high street who they know are more likely to work with self-employed buyers. An advisor will also be able to talk you through the entire process with you and assist with proving your income.
Other than proving your income, tips for increasing your chances of being accepted for a mortgage when you are self-employed are much the same as what they would be for anyone else.
To increase your chances of being accepted you should:
- Save as much as possible for a deposit
- Take a look at your credit rating
- Correct any mistakes you find on your credit report
- Ensure you are on the electoral roll
- Seek professional advice from a mortgage broker or advisor
Get In Touch
If you are looking to buy a home and are self-employed, please get in touch for advice and to discuss how we can help you.
Your Home may be repossessed if you do not keep up repayments on your mortgage
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