How to Obtain a Self Employed Mortgage

| Updated on September 25, 2023
Get Mortgage When Self-Employed

Self-employed people often come up with more challenges when trying to obtain a mortgage. That doesn’t mean securing one is impossible, however. 

Your Requirements for a Self-Employed Mortgage

If you’re a sole trader, lenders will want to look at your net profit. They’ll take your net profit share into account or dividends and salary if you’re a company director, while freelancers and contractors should expect lenders to look at your average income over the past few years.

While lenders have a preference for those who’ve been self-employed for two years or longer, it might be that you can still get a mortgage even with just 12 months of accounts. Usually, you’ll need to show that you have an abundance of work coming up, but bear in mind that you may have limited options.

How Much Can You Borrow?

This depends on the value of your deposit and how much you earn.

It’s wise for you to save as much as possible for your deposit. This often provides you with a typically paid 4.5x your annual income. However, this number isn’t necessarily static, as it depends on your circumstances. the improved range of potential deals.

Once you have all the important information in place, a self-employed mortgage calculator can help you get an idea of the amount that you could borrow. Here are some more tips on how to get a mortgage as a self-employed person.

Also Read: What’s Better? Loan Through a Bank or a Mortgage Company?

Find Yourself a Mortgage Broker

As a self-employed person, time is unlikely to be your greatest asset. So finding a self-employed mortgage who knows what they’re doing should make for a more efficient process for you.

While the cost of a broker could increase your overall costs, they’ll know what lenders want and can assist you in finding the right deals. One thing to note here is that some brokers charge their fee to the lender, which means it wouldn’t cost you anything.

Raise Your Credit Score

It can sometimes be just simple oversights that are responsible for your credit rating falling, such as old credit accounts not yet closed, or not being on the electoral roll at your current residence.

You should check your score to find out if you can make any improvements. Multiple companies allow you to do this, such as Experian, Credit Karma, and ClearScore.

Get an Accountant on Board

This is another piece of advice that will add to your overall cost. Professional advice, however, should not be underestimated.

It will more likely be the case that lenders trust your financial details if a professional has prepared your accounts. You’ll also save yourself some time and benefit from the expert tax advice you’ll get. Getting an accountant on board can help you with your tax changes and understand what you can and can’t claim as expenses, for example.

Get Organized with Your Paperwork

As a self-employed person, you’re already responsible for keeping accurate tax records. So you should have a system in place to make getting your paperwork together simple and straightforward for your lender.

Lenders will also want to see form SA302, which you can access from your online HMRC account. 

Joseph Williams


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