Self Employed

Fee Free Mortgage Advice

Self Employed

Whether you are a sole trader, director of your own limited company, in a partnership or even working as a contractor, obtaining a mortgage when you’re classed as self employed can be a little more difficult, especially in the Covid world we now live.

How much more difficult is it to obtain a mortgage?

The key is to ensure your income is presented to the lender in the correct way, with the correct documentation provided to verify what is said. This is something our advisers are highly skilled in, and we have great connections and relationships with many banks to ensure your application goes through smoothly.

What documents will I need to provide?

This depends on the nature of your income, and how the lender requires us to present this to them. Our advisers will ensure we fully understand your circumstances so that this is done in the correct way with the correct documents provided.

Self employed mortgages

In our opinion, it is a common myth that obtaining a mortgage when self employed is more difficult. We do understand that many people struggle when applying themselves, but as long as you speak to someone who understands your circumstances and income, the process can often be very straight forward.

To help, we have included some of our most commonly asked questions from our self employed clients when applying for a mortgage:

I’ve only been self employed for 1 – 2 years, can I still get a mortgage?

If you have two years of trading, with accounts or tax returns to confirm your income, then this is very straight forward. If you can only provide income proof for one year, then this can be considerably more difficult but it can still be possible depending on a range of factors. This includes your experience and what you were doing immediately prior to going self employed, the industry you work in, and the amount of deposit / equity in your property that you have (along with many other factors). Our experts will be able to guide you through this maze and explain exactly what your options are, what you can achieve and when.

My business has been affected by Covid, will this prevent me from getting a mortgage?

It depends on the extent that your business has been affected. Most lenders appreciate that Covid will have impacted the majority of business in the UK, however now we are out of lockdown they will expect you to have started trading again. Banks will typically ask to see your latest three months bank statements to show income going into your account. If this is something you can show, then you remain in a strong position to obtain a mortgage. There are a number of other important factors to consider, which our advisers can explain during your enquiry.

I operate as a sole trader, what documents will I need to provide?
Typically you will need to provided your last 2 – 3 years Tax Calculations and Tax Year Overview, both of which are available online to download from your HMRC account. The majority of lenders will also ask to see your latest three months personal bank statements, plus three months business bank statements if you use a separate account.
I operate as a limited company, what documents will I need to provide?

Most lenders will typically ask for your last two years full company accounts, along with three months statements for your business account. However, some lenders will also ask you to provide your last 2 – 3 Tax Calculations and Tax Year Overview, both of which are available online to download from your HMRC account, whilst some banks will write directly to your accountant (with your permission) to obtain an ‘Accountants Reference’ to verify your income.

I’ve recently switched from operating as a sole trader and set up a new limited company, is this an issue?
Absolutely not. Whilst in this scenario there are a number of banks we would steer clear from, there are enough lenders who are comfortable with this that we would be very confident of obtaining you a very competitive product.
– I work as a contractor, am I still classed as self employed?

Yes and no, as this depends on which bank we use. The majority of lenders would class you as self employed and therefore verify your income through your limited company accounts, however there are a small number of high street banks who would be able to use your contract and existing ‘day rate’ to confirm your income. This route often has potential for you to borrow a significantly higher amount, and is something our advisers can discuss with you in more detail as part of your enquiry.

Our advisers are experts in Self Employed mortgages 

CONTACT US