So, you’re self-employed and looking to get a mortgage?
As an independent mortgage broker in Lincoln, Look After My Mortgage understands that being your own boss has its perks, but can sometimes make getting a home loan trickier. Don’t worry – we’re here to guide you through the process.
What qualifies as self-employment?
1. Sole Trader
2. Limited Company Director (or an employee/shareholder) holding over 10% (commonly 25%) of company shares.
3. Limited Liability Partnership
Lenders often impose stricter criteria on self-employed individuals due to the inherent financial risks. Twenty percent of businesses fail in their inaugural year, and approximately 60% go under within their initial three years (according to an online source).
Here are several key factors to consider.
The paperwork, we know this isn’t your favourite part of self-employment. But having your accounts in order is vital for securing a mortgage. Let us worry about satisfying the lender’s demands. We’ll work quickly but diligently to get your application approved. You will typically need your tax returns, tax year overviews and accounts.
- Minimum one year’s trading (it’s a myth that you require two years).
- We can consider retained profits over the last two years considered at 100%
- Most recent years income can be considered at 100%. If drawings are stable or increasing otherwise 100% of the average of last two years is considered.
- Self Employed Declining Profits is accepted provided you can still meet affordability criteria.
- If you have a job, we can consider second self-employment at 100%.
Each lender will have its own policy and criteria when it comes to your income assessment. Once we’ve assessed your situation, we can recommend the most suitable lender and product to meet your needs. With access to every UK mortgage lender, we search the entire market to find you the right deal. Our expert consultants will support you every step of the way.
Securing a mortgage when self-employed opens your dream of owning your perfect home. Don’t let the process put you off. With Look After My Mortgage guiding you, we’ll demystify mortgage-hunting and take care of everything, leaving you free to focus on your business.
Feel free to touch to discuss your requirements with our friendly team. We’re ready when you are.
Your home may be repossessed if you do not keep up repayments on your mortgage.
