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Products Updated May 8, 2018

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Mortgages For Self Employed People

If you are self employed, a contractor or freelancer or you perhaps you own your own small business then we can help you get a mortgage. View and compare the mortgages rates and deals on offer or simply call us to speak to a mortgage expert.

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Your home may be repossessed if you do not keep up repayments on your mortgage.

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All credit types
Rated 4.9/ 5

Loans Warehouse Why?
Why?

This provider is our Expert’s Choice in its category as it won tops marks for the following.

  • TRUST
  • VALUE
  • EXPERTISE & KNOWLEDGE
  • CUSTOMER SERVICE

Learn more about how we review and assess the providers here on Lending Expert.

LTV
60% - 100%

Initial Rate
1.19% - 4.32%

Standard Rate (SVR)
3.94% - 4.79%

APRC
3.6%

Type
Variable & 3 ,5 & 10 Fixed Rate

The mortgage experts at Loans Warehouse can quickly assess your requirements and search the market place to find you the perfect mortgage deal. Click get a quote to make an enquiry today.

About Mortgages For Self-Employed People

Mortgage options for the self employed

Mortgage options for the self employed

If you are self-employed and are looking for a mortgage you are likely to be aware that the old self-certification mortgages were finally banned in April 2014 after misuse by both lenders and borrowers that led to a much higher risk to both parties. Self-certification mortgages were highly attractive to those who were self-employed as a loan could essentially be agreed by the borrower certifying that their income was enough to be able to afford the repayments. It is perhaps somewhat surprising that this type of mortgage was available for so long as every other mortgage applicant was expected to provide evidence of income for the previous two years in order to prove that they were a low enough risk to be given a loan.

What This Means in Real Terms

Essentially the changes mean that if you are self-employed that you will have to provide evidence of your income in order to qualify for a mortgage. This just brings applications from self-employed people in line with those who have a standard income. The additional information requirements brought in in April 2014 for standard mortgage applications also apply to those who are self-employed, although in a slightly different format due to the different nature of the job.

You are likely to see many web pages stating that it is now much harder for self-employed people to get a mortgage than it is for those on standard income streams. This isn’t strictly true. It is certainly much harder to get a mortgage than it was using the old self-certification route, but overall, while you may have to shop around a little more, you should find that it is not actually much harder to find a mortgage if you are self-employed.

How To Get a Mortgage if You Are Self-Employed

Mortgage options for self employed, contractors, and freelancer workers

Mortgage options for self employed, contractors, and freelancer workers

No matter what your income type, you will need to know the requirements lenders set out in order to qualify for a mortgage. The standard requirement is that you have evidence of the last two years’ worth of income, although there are always exceptions to this with some requiring more and occasionally requiring less. This is where you will have to do some research, or get advice from a financial adviser, into the types of documentation that will be accepted by a lender. For those on a standard income stream it is easy as all that is required is payslips and P60s, however you will have to provide your own accounts record if you are self-employed.

If you have at least two years’ worth of accounts and proof of income then you can potentially have the choice of choosing your mortgage product from the standard range and can go through the normal mortgage application process, although be prepared for a longer than average application meeting due to having non-standard proof of income and potentially also additional questions regarding your future income. In some cases, to reduce the risk to the lender, they will ask for a larger deposit than they would from someone on a standard income stream, but this should be made clear very early in the process so you do not end up with a rejected mortgage application because of information you were not aware of.

If you don’t have the required amount of account records, or you have personal circumstances that are making it difficult to find options on the standard market, there are mortgages available specifically for those who are self-employed. In order to access these mortgages you will have to go through a specialist mortgage broker as the lenders who offer these mortgages will generally only provide a mortgage is there is an independent financial adviser in the loop.

Mortgage calculator – how much will it cost?

Use this calculator to get an idea of costs, how much you could potentially borrow and what the monthly repayments will be.

Get advice from a top broker

If you are in any way confused or worried about the whole process then you should get advice on how it would be best to proceed from an independent no-fees mortgage broker who has experience dealing with self employed applicant cases. They will be able to point you in the direction of lenders who are more friendly towards self-employed people, and they will also be able to advise you on the different options you have available to you for your specific circumstances. This advice could be particularly useful if you have an income that is partially from self-employment and partially through the PAYE system.

Learn More
All credit types
Rated 4.9/ 5

Loans Warehouse Why?
Why?

This provider is our Expert’s Choice in its category as it won tops marks for the following.

  • TRUST
  • VALUE
  • EXPERTISE & KNOWLEDGE
  • CUSTOMER SERVICE

Learn more about how we review and assess the providers here on Lending Expert.

LTV
60% - 100%

Initial Rate
1.19% - 4.32%

Standard Rate (SVR)
3.94% - 4.79%

APRC
3.6%

Type
Variable & 3 ,5 & 10 Fixed Rate

The mortgage experts at Loans Warehouse can quickly assess your requirements and search the market place to find you the perfect mortgage deal. Click get a quote to make an enquiry today.

No matter what your situation, you should make sure you do your research before getting into the details of filling in an application form. Preparing your evidence in advance will not only save time in the long run, but will also make your mortgage options clear from the beginning.

FAQ's

What proof of income will the lender require?

If you're self employed then proving your income can be more challenging, but isn't impossible. Whether you are a sole trader, a company director or a contractor, the type of proof you can provide my differ.

The most popular proof of income that mortgage lenders accept would be SA302 documents that are now available as a print off from your accountant. An SA302 document will show your income from the previous financial year. You may also be able to demonstrate income by means of your company or business accounts, or via a letter or statements from your accountant.

Each lender will also have different rules about how long you must have been in business/self employed to qualify for their mortgage. Some lenders will accept applicants with only 1 year of accounts, while others will require a longer duration of 2 years accounts for example.

As a company director what do I need to provide the lender?

As a director you can provide the lender with payslips and SA302 documents that shows your income and dividend payments.

Do dividend payments count towards my income?

Yes. Dividend income is allowed as part of the income calculation.

Can I use BTL property rental income on as part of my income?

Generally speaking mortgage lenders will not accept rental income as part of the income calculation. If you are a self-employed landlord, some lenders will take net income into account if you can present sufficient evidence and the property can be shown to be self-funding; this will be after all management and finance costs are deducted.

Will the lender want to see my LTD company accounts?

Yes and No. This depends on the lender and how much they wish to see and investigate further. They may be happy with your last 2 years SA302 documents and take an average income calculation from that. They then may wish to back this up by looking into the LTD company to check the income and expenses there to also verify a solvent income stream. This is where the help from a good broker can help ensure you have everything in order that the lender will need to see.

Can I get a mortgage being self employed with bad credit?

If you have a history of bad credit such as missed payments, CCJ’s or even bankruptcy then you may find it more difficult to get a mortgage. In this instance we would advise you to speak with a mortgage expert who will be able to assess your needs and credit worthiness.

Our mortgage brokers have an in-depth knowledge of the mortgage market and understand which mortgage lenders offer mortgages to people with a bad credit history.

It is also important to consider that if you require a mortgage with a bad credit history or low credit score then you should expect to pay a higher rate of interest for your mortgage. This will take careful consideration to ensure you can meet the repayments within your household budget.

Can I self certify my self-employed income?

No. The days of self certification mortgages are over. The lender will need to see documentary proof of your income.

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