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Can I get a mortgage if I am self-employed?

The answer is ‘yes’!

Being self-employed will not hinder you from getting a mortgage. Any lender you approach for a mortgage, whether on the high street or through a broker, will want to ensure you can afford your mortgage and will ask for proof of income. For a self-employed person, this is in the form of Tax calculations and Tax Year overviews. Most lenders will insist on at least 2 years of tax information which can be an issue for those of you in business for only a year. However, we at Finance Expert Ltd have access to lenders that will take one-year tax information. We can also put you in touch with a firm of Accountants to help you get ‘mortgage ready’ if required. Given the choice of lenders we have access to, we will find the best fit for your needs.

Mortgage Myths

Myth One – Self-employed business owners will not be able to get a mortgage, and if you can get a mortgage, the rate will be less than ideal.

Reality – Anyone can apply for a mortgage and will need to meet certain criteria as dictated by the lender. This means it is essential to provide proof of income, whether self-employed or not, and meeting the other criteria set by the lender. Mortgage rates are set by the lender dependant on the market, not on the customer.

Myth Two – Additional products, such as insurance, are not available to self-employed people.

Reality – Again, anyone can apply for protection to cover mortgage/family commitments. Premiums are based on the risk the Insurer perceives there is in you making a claim. Those risks are based on your health and not on the fact that you are self-employed.

Myth Three – There is a reduced limit to the size of mortgage available to those who are self-employed.

Reality – As with all mortgages, the amount you are able to borrow is based on your ability to afford the monthly payment. So, providing proof of income is a major factor in anyone’s application, regardless of employment status.

Myth Four – Offset mortgages (where you can adjust your mortgage, or pay off early) are not available to self-employed people.

Reality – Offset mortgages are available to anyone who has set aside savings in a bank account that pays little or no interest and can be linked to the mortgage.

Do’s & Don’ts

When applying for mortgage

1) Come prepared! Make sure you have all the necessary documents needed to kick-start your mortgage, this should speed up the process to secure your dream home.

2) Be transparent – we need to know the accurate information in order to make sure the deals we find you are the perfect fit for your situation.

3) Have a rough idea of the size of mortgage you will need, and how fast you would like to pay it off.

4) Don’t withhold information that could affect your application.

5) Take your time when choosing which loan is for you. You have to make sure that the mortgage you choose is the best fit for you, so don’t rush into making any decisions!

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