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Self Employed 

There is no specific type of mortgage for Self-Employed mortgage applicants. The difference lies in how you prove your income. You’ll need to satisfy a lender that you’ll be a reliable borrower by proving your income is steady, your expenses are reasonable, and your business is showing sustainable growth.  

How will my Self-Employed application be assessed?

When assessing whether you’ll be able to afford a mortgage and how much to lend you, a mortgage company will focus on three things:

  • Your Income – how much you pay yourself each month

  • Business Expenses – evidence of your expenses and operating costs

  • Business Security – your ability to keep trading  

What information will I need to provide?

You will need to have been trading for at least three years, and have two years of accounts less than 18 months old. However, I work with a few lenders that will accept 1 Years Accounts. Your accountant can request your SA302 documents from HMRC that confirm your declared income and tax paid. You’ll also need to provide bank statements.

However, the type of information you’ll be asked for will depend on your Self-Employed status.

  • Sole Trader – lenders will base their calculations on your SA302 and your expenses.

  • Partnerships – are treated the same as Sole Trader businesses.  Lenders will want to know your share of profits.    

  • Limited Company – lenders will take both your salary and dividends you’ve drawn into consideration when calculating your income and how much to lend you. You’ll also need to produce three years’ worth of limited company tax accounts. 

Ten top tips to secure a Self-Employed Mortgage?

  1. Take time to think and plan, it can’t all be done in a tea break.

  2. Speak with an experienced, regulated Mortgage Broker to avoid rejections.

  3. Tell Your accountant what you’re planning. Ask them to compile your latest sets of Tax Accounts.

  4. Don’t change your Self-Employed status beforehand, so your income method stays steady.

  5. Check your credit report, then pay off any outstanding debts. A good credit score will always work in your favour.

  6. Get your business and personal bank statements in order. Lenders don’t like pay day loans, gambling, and other similar entries.

  7. Make sure your name and address are entered correctly on the Electoral Roll.  Lenders use this to check your identity.

  8. Curb unnecessary spending before applying.

  9. Aim to hit one of the deposit bands – 10%, 25% and 40%.  

  10. If you haven’t got a large deposit, find out about the 5% Mortgage Guarantee Scheme. 

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