Q. I am self-employed, can I still get a mortgage?
A. The answer to this question is most definitely yes. But (and you knew there was a but coming, didn’t you?) lenders are a little stricter with self-employed applications. It frustrates me when I hear that lenders haven’t been helpful to a self-employed applicant; something which is often mentioned in the media. Like anything in life, it helps to be armed with some knowledge.
Some key points to note for self-employed mortgage applicants are:
- You must have your documents in order. The majority of lenders will require your tax calculation (also known as an ‘SA302’) for the last three years. This can be ordered from your accountant, HM Revenue and Customs or from the HMRC website. In short, this is a summary of your self-employed income, net profit or dividends and salary, if you are a limited company
- Most lenders will then take an average of the last two years’ income. However, some lenders will take the most recent year’s income and others have individual ways of looking at your income
- There are some lenders in the market that will accept you if you have only been self-employed for one year, instead of the usual two or three years
If you are self-employed, the most important thing to do is talk to a mortgage broker before you find a property. They will help you fully understand what paperwork is required and how different lenders will assess your income. That will give you an idea of what’s achievable.
So, the good news is that there are lots of mortgage options out there for home-movers, people looking to remortgage, first-time buyers and investors. It just requires good knowledge of each lender’s self-employed criteria and a little patience to negotiate the lender’s underwriting procedures.
I hope this helpful to anyone who is self-employed and looking for a mortgage.
BB Mortgages helps scores of self-employed people find a mortgage each year. For advice, call us on Newark 01636 674455