SELF-EMPLOYED MORTGAGES

Getting a mortgage application approved when self-employed is more difficult; however, there are more opportunities now than ever before. The process is complicated because you need evidence that you have a steady income and can be relied upon to meet your monthly repayments. Complicated it may be, but not impossible. We have experience helping with sole trader mortgages and self-employed people obtain mortgages that suit their particular situation.

Yes, you can. However, bear in mind that mortgage lenders work to their own processes and protocols; therefore, not all lenders will approve a mortgage application if you have only been self-employed for one year. We have a network of lenders who are not only willing to review your application but are likely to approve your mortgage.

For further information visit our 1 year of accounts page.

The majority of lenders will ask for proof of income from your self-employed work dating back two or three years. The amount of time you need to be self-employed to qualify for a mortgage varies depending on the lender and the type of mortgage you are seeking. However, some organisations will be willing to lend if you only have one year’s worth of accounts to show.

Generally, high street lenders will require at least two years of self-employment history to qualify. However, some lenders may require three to five years to be eligible for a mortgage.

Lenders may also consider other factors, such as your credit score, income, and other financial information when determining if you qualify for a mortgage. It is important to note that the amount of time you have been self-employed is just one factor that lenders consider when determining if you qualify for a mortgage.

We advise speaking to us at ams: Our expert mortgage brokers have access to a variety of lenders with a more flexible approach. We tailor our approach based on your unique circumstances including less than two years of self-employment.

For the best chances of success, we recommend saving a 5-10% deposit. However, don’t forget that your credit history is also an important aspect to consider when applying for a mortgage.

We are sometimes asked about lower deposit levels for mortgages. There are a few who will consider these types of mortgages, however, you will stand a better chance with a larger deposit.

Generally, self-employed borrowers are always required to have a higher deposit than standard borrowers, as they are classified as being riskier.

Speak to us about this for further information, in principle, the higher the deposit the better but there are options with some lenders as low as 5%.

There are multiple ways to prove your income as part of your self-employed or sole trader mortgage application. We recommend reading our guide on proving income when self-employed. Some methods include:

• Providing your accounts
• Submitting a reference from your accountant
• Providing an SA302 form (this is a summary of your tax affairs for a specific tax year, showing the total income and tax due or paid for that period)

At ams: as self-employed mortgage advisors we have many years of experience in helping self-employed people to find the right mortgage for their needs. Trust us to steer you through the complexities of self-employment and provide top-quality advice on the best way to obtain a loan. Our experts share their extensive knowledge of the specialist self-employed mortgage products we have available and provide tailored advice to ensure you get the right deal for your circumstances.

We have access to portfolio lenders that can consider a range of criteria, such as short-term accounts, and multiple sources of income, and accept a variety of proofs of income. Contact us in confidence for exclusive mortgage deals that are not available on the high street.

No self-cert mortgages were banned by the Financial Conduct Authority (FCA) in April 2014.

The FCA considered self-cert mortgages to be unfair to consumers, as they allowed for too much leeway in approving loans, leaving borrowers vulnerable to taking on debt that was too difficult to pay back. This was seen as a major factor in the 2007-2008 financial crisis that caused many people to lose their homes in the UK and worldwide. So, as reputable self-employed mortgage advisors this is a mortgage service, we can no longer provide.

Yes, a self-employed mortgage guarantor can help. A mortgage guarantor is someone who agrees to take on the financial responsibility of a loan if the borrower is unable to repay it. Mortgage companies do generally prefer younger guarantors though. This can help a borrower secure a loan even with a lower income or less-than-perfect credit. A guarantor would help with applications for both self-employed and sole trader mortgages.