How do you go about getting a mortgage when you’re self-employed?
When you apply for a mortgage, you are considered to be self-employed if you have more than a 20% share of the business from which you get your main income. Being self-employed can mean different things for different people, you could be a director or a sole trader or you might be a contractor who has set up a limited company.
As a self-employed borrower, you will, in theory, have access to the same range of mortgages as everybody else and you’ll need to pass the lender’s affordability tests in the same way as any other borrower.
Most lenders when considering mortgage applications from someone who is self-employed require 3 years of accounts but there are some lenders out there that may consider you even with accounts for just one year.
As you might not have payslips to prove your income, you will be required to provide certain documents to help the lender be confident that you can afford to borrow the amount you need to buy a home. There are plenty of ways to prove to a mortgage lender that you have a reliable income, it’s usually just a case of jumping through a few more hoops.
Lenders also prefer self-employed mortgage applicants to provide accounts that have been prepared by a qualified, chartered accountant; that way they can be sure of your reliability. It’s likely that they will focus on the average profit you’ve earned over the past few years.
Please call or email us at Asset Harbour if you would like more information.