FAQ's About Self-Employed Mortgages

Do self-employed individuals face higher interest rates or fees?

Not necessarily. We will work to secure the best rates in the market and these will often be the same rates as an employed applicant could access. If your circumstances mean that we need to apply to a specialist lender, the rates may not be quite as competitive.

What documents do I need when applying for a self-employed mortgage?

Required documents typically include tax returns (usually the last two to three years), business accounts, bank statements, and proof of identity and address. Additional documents may be needed depending on the lender's specific requirements.

Can I get an mortgage if i'm newly self-employed?

If you have been self-employed – and can prove your income - for at least 12 months, then some lenders are happy to consider a mortgage application.

How do lenders asses income for self-employed applicants?

For sole traders:

Most lenders will take an average of:

          Your last two or three years income figures you have reported to HMRC;

But some lenders will consider:

          Your last year’s income in isolation which can boost the amount you can borrow

For company directors:

Most lenders will take an average of:

          Your last two or three years income figures you have reported to HMRC; or

          Your salary and dividends for the last two or three years

But some lenders will consider:

          Your last year’s income in isolation which can boost the amount you can borrow

          Your salary plus the net profit of the company, as your personal total income

Do I need insurance?

We firmly believe you should stick to what you are good at. For us, that’s arranging mortgages. So we are not going to ‘nag’ you about insurance. But it is important to consider what could happen if life takes an unexpected turn, so we will offer to refer you to a specialist who can provide expert advice in this area.

What if I'm not self-employed?

Whilst we specialise in helping entrepreneurs find mortgages, we intend to take good care of all your mortgage needs for the future. Whether that’s helping to arrange a new mortgage on your current home, helping you with buy-to-let properties or helping your family onto the property market. And what’s more you don’t have to be self-employed! We have many existing clients that are employed and have been with us for years and we treat them all with the same care and attention. So even if you’re not self-employed and you want some help, get in touch.

What if I'm a contractor?

Sometimes treated as employed by mortgage lenders, contractors will often be required to have been contracting for a minimum period of time, or have a minimum period left on their current contract. The lender may also not take into consideration the full amount of your contracted income. If you need help securing the best mortgage terms, get in touch.

I have just set-up a new business?

Most lenders require your business to have been established for at least two years before they will consider any income from it for mortgage purposes.

But there are some lenders that are happy to consider your business once it has been established for a minimum of 12 months.

Sole Trader to Limited Company?

If you have started a successful business as a sole trader, you may have followed yourAccountants advice and started trading as a limited company.

The bad news is that with most lenders, that “sets the clock back to zero” again. You will normally need a minimum of two years proof of income as a limited company, to evidence your personal income, before you will be able to meet the lending criteria of mortgage providers.

However – there are a small number of mortgage lenders that are quite happy to consider your affordability, based on your previous earnings as a sole trader.