1. Seek Mortgage Advice
- Mortgage brokers are your allies. Here at FRANK Mortgages we understand the intricacies of self-employed mortgages and can match you with the right lenders.
- Their expertise increases your chances of approval.
We have access to specialist lenders who can be more accommodating for self-employed, especially with only a short trading history.
2. Save Up a Healthy Deposit
- Lenders love a substantial deposit. Aim for at least 10% to 20% of the property value.
- A larger deposit reduces risk and shows commitment and allows you to obtain the best rate possible.
There are now mortgage options for when you don’t have any deposit at all. Also known as a 100% mortgage. Read our guide here to see if you could be eligible.
3. Maintain a Good Credit History
- Pay bills on time, manage debts responsibly, and check your credit report.
- A strong credit profile improves eligibility.
You can get a free copy of your credit report here.
If your credit report does contain adverse credit such as defaults, CCJs, and missed payments – Don’t panic. We have access to specialist lenders who can take a human approach to your adverse credit and therefore we should still be able to find you a lender.
4. Documentation for your business.
- Gather paperwork related to your personal and business finances:
- Tax returns – Lenders ideally will want to review your latest two years’ tax returns, tax calculations, and tax year overviews.
- Business Bank statements
- Company Accounts
Frequently Asked Questions (FAQs)
Getting a mortgage if you’re self-employed isn’t necessarily harder, but the application and underwriting process will be more detailed.
You can use a combination of documents to prove their income for a mortgage. This can include tax returns, SA302’s/Tax Calculations business profit and loss statements and bank statements.
There is no “best” mortgage for self-employed people. Every applicant has their own unique financial situation. For some, it might be the mortgage with the lowest interest rate. For others, it might be a loan mortgage provider that accepts clients who have only been self-employed in the short-term such as 1 year.
Mortgage lenders look at individuals’ net income to determine whether they have enough to cover their mortgage. They examine year-to-year trends for the business’s gross income, expenses, and taxable income. Mortgage companies also look for indications that income / net profit is steady or increasing over time.
Are you a first time buyer?
Check out our first time buyers guide here.
