Self employed

Lenders criteria for the self employed can vary from lender to lender quite considerably. The length of time you have been self employed, how each lender considers your income and the evidence they require will be different for every lender.

Many self-employed people believe that it is very difficult to get a mortgage, therefore it is very important to get help and advice to ensure that the right lender is approached and that you meet their criteria to enable you to obtain a mortgage.

We can help explain how your income will be assessed once they have reviewed your personal tax returns. In some cases, lenders may ask for your company accounts and bank statements if you operate as a Ltd company or partnership.

There are a number of mortgage lenders who will often accept self-employed borrowers with two years or some would even accept just one year’s accounts if you have ongoing contracts and a consistent track record of work.

The actual figure a lender uses can vary. For example, a limited company shareholder could use their salary and dividend payments with one lender, whereas another lender may be willing to use their salary and a % of the company net profit. These figures could be very different and can have a major impact on the amount you can borrow.

You may have recently changed from being employed to self employed, or you may have changed from being self-employment as sole trader to a limited company. This change could also have an effect on some lenders’ criteria for not accepting your application.

As intermediaries, we know each lender’s requirements and we can also discuss any non-standard cases with the lenders prior to submitting the application. This would obviously help in arranging your mortgage quickly and avoid any unforeseen application declines.

Self employed- contractors

If you are a contractor and charge by the day, you may be contracting through either your own limited company handling your own tax & NI or an umbrella company.

As a contractor, you don’t need to apply for any special mortgage and can have access to all the lenders in the UK. The key thing that a contractor needs to consider is how each lender calculates your income. This can vary hugely from lender to lender. Some lenders will want to see a full 3 years history of contracting including tax returns and trading accounts, other lenders may be happy only to see a copy of your latest contract and use your current day rate to calculate your annual income.

Other information /documentation may also be required:-

- How long you have been contracting?

- Were you employed previously in the same profession?

- Remaining time on your current contract?

- Will your current contract get extended?

As different lenders have different criteria, our help and advice could make the difference between being accepted or being rejected for your mortgage.