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How Do I Get a Mortgage If I'm Self-Employed?
If you’re self-employed, it can be more of a challenge to get a mortgage because you’ll need to prove you have a reliable income. There are plenty of ways to prove to a mortgage lender that you have this steady cash flow, it’s usually just a case of jumping through a few extra hoops.
Since the introduction of the Mortgage Market Review in 2014, mortgage providers have considerably tightened up their lending criteria and need to be convinced you can afford your mortgage before they agree to lend you the money.
What will I need to provide?
• Two or more years’ certified accounts
• SA302 forms or a tax year overview (from HMRC) for the past two or three years
• Evidence of upcoming contracts (if you’re a contractor)
• Evidence of dividend payments or retained profits (if you’re a company director)
Lenders also prefer self-employed mortgage applicants to provide accounts that have been prepared by a qualified, chartered accountant; that way they can be sure of your reliability. It’s likely that they will focus on the average profit you’ve earned over the past few years.
If you only have accounts for one year or even less, you may find it a challenge to convince a lender that you can afford to repay a mortgage – but, again, it’s not impossible. Having evidence that you’ve got regular work or providing proof of future commissions may help.
Having a healthy deposit and a good credit history will also help your chances of securing a mortgage when you’re self-employed.
How can I increase my chances of getting a mortgage?
There are a number of steps you can take to increase your chances of being accepted for a mortgage when self-employed, such as:
• Save as much as you can for a deposit to lower the amount of money you need to borrow
• Check your credit rating for free with MoneySuperMarket’s Credit Monitor
• Correct any mistakes on your credit report and rectify
• Sign on to the electoral roll and update any address moves
• Seek advice from a mortgage broker – Futurelink Group partner with over a dozen including Capital Finance, part of Countrywide, the UK’s largest estate agent.
How to find the best mortgage deals for the self-employed?
Naturally, we recommend shopping around and comparing mortgage deals on MoneySupermarket and well known online portals. Select the type of mortgage you’re interested in, enter the amount you need to borrow, the duration of the term and the property value and you’ll be able to compare quotes easily and quickly.
If you are looking to save money on your lending whether it’s for a new home, home improvement, car etc., what about looking to see how you can improve your net take home pay?
Futurelink can help you maximise your take home pay with a number of different self-employed payment options across that are ideal for those working in many sectors. For more information,please call us on 01923 277900 or email on email@example.com