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Self Employed Mortgages

There are a lot of benefits of being self-employed and running your own business. However, getting a mortgage isn't always one of them. Lenders like to see documentation that shows a good current income, a long history of steady income and a good indication that the steady income will continue.

This is compounded by the fact that the self-employed tend to 'shelter' their income as much as possible to avoid tax and so lower the income they can show.

Factors Affecting Mortgages
for the Self Employed

Lenders will class your application as a self employed application if you are a sole trader, a partner or own more than 20%-25% of the shares of the company you work for.

So even if you are paid via PAYE, you could be classed as self-employed for mortgage purposes.

The following 2 factors will determine whether a lender will consider your application

  • How long have you been self-employed - Generally they will require that you are self employed for a minimum period which may be 6, 12 or 24 months.
  • Can you prove your income - This can be by 2 or 3 years accounts or an accountants reference.

If you cannot fit these requirements then it should still be possible to get a mortgage:

  • Individual Underwriting - A small number of lenders may look at your case on an individual basis. We need to put together a good case including maybe bank statements showing good income streams.
  • Self Certify Income - One option may be to self certify your income
  • Less Than 6mth Trading - A couple of lenders will look at your case even if you have only been trading for less than 6 months. Loan to value may be limited or the interest rate my be higher though.

Best Self Employed Schemes

Obviously the best self employed scheme for you will depend on your exact circumstances.

If you have 3 years accounts then you will be able to apply for loans on a similar basis to employed people and all of those schemes will be available to you.

If you cannot fully prove all of your income then you may need to self certify your income, or use one of the lenders that will look at your case individually.

Getting Help

If you are self employed then it might be good idea to get a mortgage adviser to help you with your application. They could have special deals that are not available direct and they should be able to ensure your application goes through smoothly.

You should talk to two, three or more brokers. See what deals they offer you and ask them how much experience they have in dealing with cases like yours.

Complete our online enquiry form to get help from a broker.

THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE

FaqMyMortgage.co.uk is not a regulated firm. The information and tools on this site are for general information and background only. No part of this site should be construed as 'personal information' or 'advice' as defined by the Financial Services Authority (FSA). Any opinions expressed are the personal opinions of the writer only. You should seek professional advice to confirm that any suggestions or opinions apply in your personal circumstances.

Whilst every effort has been made to try to ensure the accuracy of information on this site, I cannot guarantee that it is all accurate or up-to-date. You should ensure that you confirm any information that you will rely on with the appropriate lenders or a mortgage adviser. Always obtain a Key Facts Illustration if you wish to compare mortgages or if you wish to apply for one.

If you would like any personal information or advice on your particular circumstance then you should speak to an FSA Regulated Mortgage Adviser