From setting your own hours, to being your own boss; for an increasing number of people, self-employment is becoming a way of life. For the many benefits this type of employment can bring, there are the inevitable downsides to consider. One possible element is the ability to get a mortgage.
Recent changes in the mortgage market have resulted in lenders becoming more stringent in their underwriting and taking a more cautious approach when assessing affordability. For sole traders, partnerships or limited company directors the process of how lenders make their calculations can present itself as extremely frustrating as many lenders simply do not have the understanding of your business.
Fortunately, at Just Mortgage Brokers we ensure that the advisers you speak to are experts in this particular mortgage field and in turn have the knowledge of how differing lenders make these assessments.
What are Self Employed Mortgages?
Technically there is no such thing as a “self employed mortgage”, which means that all borrowers should have access to exactly the same rates and mortgage options. So what is different? Ultimately it is the way lenders view income. Typically for those employed on a PAYE basis a lender will be happy to look at payslips that should confirm the annual salary of the applicant however, with those that are self employed or a limited company director the requirements can vary enormously
What do I need to get a self employed mortgage?
When lenders assess income for those that are self employed it is generally based on historical earnings rather than that which you are earning today. Typically the lender will work on an average of the last two or possibly three years earnings as verified by your accounts or via your self declaration HMRC return documents called SA302s. However with many variations of self employment, one size certainly does not fit all and some lenders are better placed than others depending on your individual arrangements. Examples of where we can help:
- 1 year trading accounts only
- Calculations based on retained profit
- Working with accountants certificates
- Assessments made using latest years figures only
- No accounts required for contractors
- Knowledge of Umbrella companies and Freelancers
How Mortgage Brokers can help
With an intricate knowledge of the mortgage market, particularly of niche areas like self-employed mortgages, our mortgage brokers can help you source and secure a competitive rate and assist in maximizing your borrowing potential.
We know which self employed-friendly mortgage providers to approach and those that will work out best for you based on your individual circumstances. We have helped many self employed customers find a mortgage that suits both their budget and their lifestyle. Ready to secure your self-employed mortgage? Contact our team today.