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Self-employed mortgages

 
 
 
 

Struggling to find a mortgage as you’re self-employed? We can help you!

We believe that everyone should be able to get the financial solutions they need. So, we use a panel of flexible lenders, who focus on helping customers in less traditional circumstances. 

Our team therefore have a range of options that can support you if you’re looking for a mortgage whilst self-employed.

Discover solutions today by calling our experts on 0800 032 4646 or by sending us an email to enquire.

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keys house self employed mortgages

What is a self-employed mortgage?

 
 
 
 

Self-employed mortgages focus on helping people who own a business buy or remortgage a house. It doesn’t matter if you don’t own the entire business, you will still be classed as self-employed if you have a share of over 20% and it is your primary income stream.

It’s often thought that getting a mortgage when you’re not a salaried worker is really difficult, but it’s actually much easier than you think.

The main thing lenders will want to understand in this situation is how much income you make and they will want to see proof of this. Therefore, so long as you can provide this information the process is quite simple.

We have a range of specialist lenders available who are experienced in handling cases with self-employed applicants. Therefore, we can support you whether you are looking to buy or remortgage.

Our solutions range from £10,000 up to £1m, with flexible repayment terms available. This means our options can be tailored to your specific needs, allowing you to achieve your property goals. 

Types of self-employed mortgages

 
 
 
 

There are different types of self-employment, which can include sole traders, contractors and limited companies.

Some of the areas we can specifically assist with include:

  • Sole trader mortgage

These products are designed to help people who are individually responsible for and own their business. In other words, the individual is essentially the business.

Getting a sole trader mortgage can be a bit complex with certain lenders, therefore it’s important that you research your options carefully to make sure you locate a suitable lender.

We have a range of lenders that accept sole trader mortgage applications, and so we may have the right solution for you.

  • Mortgages for contractors

Contractor mortgages are focused on helping people who do not have a permanent job. Often referred to as day rate contractors, people in these circumstances usually have a fixed contractual period of work with a firm, say 6 months, then at the end of that contract seek out another 6-12 months with a new firm.

It tends to be the case that skills in sectors such as IT, developers, accountants, HR professionals and support functions are where interim roles are available.

These can often be lucrative contracts providing a strong level of income, however not all lenders are able to assist with day rate contractor mortgage enquiries. This is why the help of a broker can be crucial in finding a mortgage with this type of self-employment.

It doesn’t matter whether the contracts are arranged via:

  • an umbrella company,
  • working through a wholly owned limited company;
  • a sole trader / contract in personal names.

There are solutions available for all of the situations above.  Our lenders are particularly flexible with their criteria and therefore have a range of mortgages for contractors available.

We will support you in whatever way we can, so if you’d like to understand your options call our team on 0800 032 4646.

document self employed mortgages

What might I need to provide to my lender for my mortgage application?

 
 
 
 

When you’re applying for any type of finance, you will need to provide documentation in order to prove your income and identity to the lender.

If you’re self-employed, there are a few extra documents you may need to provide.  This includes:

  • 1 years trading/SA302s – This information will help lenders to verify the amount of income you are making, and so it is massively important. Most lenders will want to see your SA302s for the last two years. However, we have lenders on our panel who are more than happy to verify your income using just one years’ documentation.
  • Statements – Bank statements will be used by lenders to see your income, monthly outgoings and spending habits. This will inform their decisions on whether they should let you borrow and how much they should lend to you.
  • Identification – Lenders will need to see either your passport or driving licence to verify your identify.
  • Limited company accounts – If you are a part or full owner of a limited company, you may need to provide the accounts. If it is your primary source of income, most lenders will review the profit and loss account of your business when deciding whether to approve you for a mortgage.
  • Accountant’s certificate – Your accountants may be asked to provide an accountants certificate. This usually confirms the level of turnover, profits and assets in a business from previous trading periods, and a forecast for the current year. This can be helpful as some lenders will be pragmatic and consider your current year’s trading as part of your application, which could improve your chances.

How do you apply for a self-employed mortgage?

 
 
 
 

The process to apply is the same with other mortgage products, and so it’s really easy to do.

Here are the main steps:

  1. Phone our professionals on 0800 032 4646 or email us to show you’re interested in applying. Our friendly team will take a few quick details from you, so we find you the right product.
  2. We will search our entire database to find a solution that meets your brief.
  3. Decision time! You decide if you want to proceed with the loan or not. If you do, our advisors will take the reins and get your funds to you as quickly as possible.

How could I improve my chances of getting accepted for a self-employed mortgage?

 
 
 
 

It can be scary applying for a mortgage, so you may be interested in finding out some ways to boost your chance of success.

Below are some key things you could do to increase your chances:

  1. Get your accounts updated and organised – Lenders will want to see proof of your income, and so it’s a good idea to get your accounts ready. Organising these could help make the process much simpler and prevent delays.
  2. Be prepared to discuss any income fluctuations – Your lender may be curious if you have lots of fluctuations in your income, as it could signal that it is not particularly stable. Therefore, it’s worth getting prepared to provide them with an explanation, so you can ease any worries.
  3. Build a good credit history – As with any finance application, the most important thing you can do to boost your chances is by building a good credit history. This shows lenders that you’re a more reliable borrower and therefore increases the likelihood that they will lend to you.
  4. Focus on saving up a big deposit - Having a large deposit can really reduce the financial risks to lenders, and so they are more likely to accept you if you are able to do this. It’s therefore important that you try to focus on saving up a big deposit.

Frequently Asked Questions - Self-employed mortgages

 
 
 
 

Is the application process the same with every lender?

Application processes are usually the same with every lender, where it can differ is the qualifying criteria.

Some lenders can be stricter with their criteria, whilst others may be quite relaxed. This means that you might get accepted with one lender, but not another.

Can you get a mortgage if you’re self-employed?

Yes you can get a mortgage if you’re self-employed. Proving your income can however be a bit more difficult, and so some lenders may be reluctant to help.

In this case you may need to speak with a lender or mortgage broker that are familiar with specialist / self-employed mortgages, who are more likely to be able to assist you.

We have a range of specialist mortgage solutions available that can help in these circumstances.

Are self-employed mortgages more expensive?

Generally speaking they’re not more expensive, as the mortgage products are the same across self-employed workers and salaried employees. 

It may become more expensive if you are unable to prove your income or if you don’t have a large deposit available, as you may get charged a higher interest rate.

Where can you get these solutions from?

There are a few different places you can go to including lenders, banks or brokers.

Some high street lenders and banks may be stricter with their criteria, which could make it harder for you to get accepted. Therefore, you may find that it is better for you to go with a self-employed mortgage broker (like us).

Brokers have access to a range of different lenders, which means they have a wider variety of products to offer. This means you may have a better chance of getting accepted.

As a broker, we have a variety of specialist mortgage options available that can help you.

Are there different mortgage products available if you’re self-employed?

It is quite common to think the mortgage products will differ for self-employed people, but in reality they are the same as the products available for salaried workers.

This means that you could get the same product as someone who is not self-employed.

How much could I borrow?

The loan amount that you are eligible for will depend on the lender. Their decisions will be based on the amount of income you make, as they want to make sure you would be able to afford your monthly repayments.

Lenders will therefore assess your monthly spending habits and income to determine how much to let you borrow.  Consequently, loan sizes may vary between different lenders.

Can Self-Employed Remortgages include a further advance / additional borrowing?

Yes, you may be able to borrow more as part of your remortgage enquiry, however you may find you cannot borrow the full amount you have asked for from some lenders.

It is always worth speaking to a specialist broker about alternatives such as a secured loan for self-employed customers, or specialist mortgage lenders that offer greater flexibility on lending decisions and may be able to help you borrow the full amount you were looking for.

Can I use a remortgage to borrow money for my business?

Most residential mortgage lenders are nervous about allowing self-employed or business owner mortgages where additional borrowing will be used for business purposes, although it can sometimes be approved for purposes such as investing in buy-to-lets.

Whilst getting a mortgage for business purposes can be tricky, there are specialist options such as second charge mortgages, where some lenders will consider applications when the loan purpose is for business purposes.

Can I get a mortgage if I’m self-employed and have bad credit?

Yes, it is possible with a specialist mortgage provider. If you have been self-employed for 2 years and have a stable income, it is achievable.

However, if you’re new to self-employment and your income regularly fluctuates it could be a bit more challenging to get accepted.

Useful guides and blogs

 
 
 
 
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