Self-employed mortgage

When it comes to a self-employed mortgage, the products are often similar to ‘standard’ mortgages, however your affordability is just calculated in a different way. But fear not, if you are a self-employed borrower, you will still be eligible to go through the standard mortgage process, you just may find it a little more challenging and you may not necessarily take the textbook route.

When it comes to a self-employed mortgage, the products are often similar to ‘standard’ mortgages, however your affordability is just calculated in a different way. But fear not, if you are a self-employed borrower, you will still be eligible to go through the standard mortgage process, you just may find it a little more challenging and you may not necessarily take the textbook route.

However, that’s where we can help. With access to the right knowledge and specialist lenders, securing a mortgage if you’re self-employed is achievable.

In the eyes of a mortgage lender, being self-employed means your monthly income is not guaranteed. You are therefore seen as a higher risk because you may not be able to afford your mortgage repayments. As well as this, proving your income can also be an issue in the absence of payslips, so lenders require other documents to ensure that you can actually afford the mortgage in the first place.

How to secure a self-employed mortgage

Securing a self-employed mortgage is no easy task, so seeking help from lenders who are experts in the realm of specialist mortgages is a must. Approaching a high street bank isn’t likely to result in success, as being self-employed essentially means you don’t have a guaranteed income and you will be someone who is considered too ‘high risk’.

Having the right documents to hand can make the self-employed mortgage process run smoothly. Most mortgage lenders will want to see the same things; two years worth of accounts, good credit history and a healthy deposit. It’s important you are working to ensure your accounts are up to date and readily available as this will prevent any hold-ups early on in the application process.

A good credit rating and history are important when applying for a self-employed mortgage. This proves to a lender you are a responsible borrower, with a proven track record of making repayments in full and on time. If you haven’t borrowed money in the past, or your rating is a little low, you will need to identify this early on in the process, so you can work to improve it.

Approaching a lender with a healthy amount for a deposit will automatically put you in a favourable position, as the more deposit you can give, the less they have to lend you and the less you have to borrow.

The importance of your business structure

Your self-employment status will largely influence the way your affordability is assessed. Depending on whether you are a sole trader, a limited company director or a contractor.

If you are a sole trader, you will be assessed differently depending on whether your income has increased or decreased recently. If it is increasing, lenders will take your average income from the past few years. If it is decreasing, lenders will use the latest and lowest figure.

If you are a contractor earning a day rate, lenders are likely to multiply that by 365 (the number of days in a year).

For limited companies, the method is two-fold; income is based on salary and dividends within the business or assess the director’s salary and profit of the business.

Why choose a mortgage broker?

The best way to secure a self-employed mortgage is to compare the various mortgage deals that are available out there and a broker, like us, can do all of that hard work for you, to ensure you can secure the best deal available to suit your circumstances.

Brokers with a wealth of experience will be no strangers to securing more adverse mortgage types and they will be aware of the lenders who specialise in self-employed mortgages from their previous experiences. This can cut out a lot of time in what can sometimes be a lengthy mortgage process.

Get in touch

You need a Mortgage Advisor you can trust and we are rated one of the Top Twenty Mortgage Brokers in the UK on Trustpilot.

Why? By using our extensive knowledge and experience within estate agency Mortgage Services, we not only help you secure the right mortgage, we also help you find the right home. From arranging viewings, negotiating on the price, to picking up the keys to your new home, our mortgage advisors are here every step of the way. We also have exclusive mortgage deals that you won’t find on the high street and we offer far more than a 9-5 service.

You’ll never experience a hard sell from us either, as ultimately, we’re here to provide you with the service you would expect along with saving you money! We aim to take the stress out of purchasing a property and we’re happy to discuss your needs in a consultation.

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