Self employed mortgage
How to get a mortgage when self employed
Getting a self employed mortgage
Despite what people say, your chances of getting a self employed mortgage are just as good as an employed person. The only difference is that you will need to provide lenders with additional proof of your income.
As you do not have an employer to vouch for your wage, mortgage lenders will need to see that you will be able to afford your monthly repayments. To do this, you will need to provide some extra documentation, depending on the type of business you own.
If you are a sole trader or company director, most lenders will generally want to see 2 to 3 years of accounts and 2 years’ tax calculations (your SA302s) and tax summaries. But if you are a contractor, you will need to show your work history over the past 12 months. A contract is preferable, but you may be able to use your recent accounts or tax returns if you don’t have one.
Mortgage criteria for self employed
Every lender has their own criteria, but you can generally improve your chances of getting a mortgage if you have a:
– Large deposit (15% or more)
– Good credit
– Stable income
– Minimum 2 years’ accounts.
Self employed mortgage 1 year accounts
Whilst most lenders will prefer your business to have been trading for at least 3 years, it is still possible to get a mortgage with 1 years’ accounts. The number of deals available to you will be reduced and you may need a bigger deposit. Lenders will also require more information about your work history and income prior to becoming self-employed. This will then be used by the underwriter when considering your application.
Bad credit self employed mortgage
Similarly, having bad credit when you are self employed does not mean that you can’t get a mortgage. As you are more of a risk to mortgage lenders, it does become more complicated as the number of choices available to you will be reduced. You may therefore need to put down a larger deposit and pay a slightly higher interest rate. But a mortgage broker like Fosters Financial will explore all the options available to you.
As a whole of market mortgage broker, we know each mortgage lender’s criteria and what they require to approve a self-employed mortgage application.
To improve your chances of being accepted, we take the time to get a good understanding of your individual needs and circumstances. If we find a suitable product that you are happy to apply for, we then manage the entire process to ensure it is a complete success.
Want to discuss your options? Get in touch or book a call with one of our experts here today – our advice is free after all!