Getting a mortgage when you are self-employed can be tricky, but it certainly isn’t impossible.
There isn’t such a thing as a “self-employed mortgage” - you will be applying for the same mortgages as anyone else. The main difference is you will be required to provide more evidence of a reliable income.
What will I need to provide for a self-employed mortgage?
You will be required to provide the same documents as anyone else applying for a mortgage, these include:
Proving your income
Different lenders ask for different documents for self-employed applicants, these could include:
Will I need to pay a higher mortgage rate?
If you can provide proof of your income, and a mortgage lender is confident you are able to make the repayments, you should qualify for the same mortgage as anyone else who is in a permanent role.
The interest rate will depend on other things and not your employment status. A larger deposit generally means a lower mortgage rate, as will a good credit score. The better your credit rating, the more mortgage deals you could be eligible for.
How will my mortgage earnings be calculated?
Sole trader
Lenders will generally look at your net profit over the past two to three years and take an average from those figures.
Limited company
Lenders will look at your share of net profit or your salary and dividends, or sometimes both
Contractor
Some lenders will use your daily rate, subject to your contract meeting their criteria
What can you do to improve your chances of getting a mortgage
How to find the best mortgage deals for those who are self-employed?
Using a mortgage broker can be a great idea as they have access to more products than you would if you were to go online or through a bank.
The team at Mortgage Required are specialists in self-employed mortgages, and would be happy to help. Give them a call on: 01628 507477, or email: team@mortgagerequired.com.
Yesterday
Skipton Building Society launches ‘Delayed Start’ mortgage meaning first time buyers won’t be required to make repayments for the first three months.
According to a survey by Skipton, first time buyers who bought their home in the last five years found that in the first three months of living there, they were spending upwards of £30,000.
6 days ago
If you have recently moved into a property with a garden that requires a little TLC, or you’d like to get on top of your current green space, check out our tips.
9 days ago
High street lender, NatWest, have launched a new product to help first-time buyers purchase a property with assistance from a family member or friend to get them on the property ladder sooner.
10 days ago
‘Buy Now, Pay Later’ (BNPL) schemes, such as ‘Klarna’ are short-term loans that allow shoppers to make a purchase, but delay paying for it for an agreed amount of time.
Klarna is one of the most popular BNPL services with 18 million customers in the UK alone, and offers interest-free payment options which is appealing to shoppers. However, does it affect a mortgage application?
15 days ago
We look at how to get the best Buy to Let mortgage rate, what's in store going forward, and options as a landlord with increasing costs.
24 days ago
Throughout this past week, lenders have continued to reduce their mortgage rates giving borrowers in the UK some welcome news following the change in global tariffs under US President, Donald Trump.
24 days ago
Did you know that buying a house, or relocating is in the top 10 most stressful life events?
Stress of course is an unavoidable part of life and there are many reasons why people experience stress, not just buying a house!
There are lots of effective ways to manage and reduce stress, check out our tips to help you.
With the stamp duty relief ending in England and Northern Ireland, we have listed the top 10 cheapest areas for first-time buyers as published by Rightmove.