Is it harder to get a mortgage if you are self-employed?

The simple answer is no, provided that you have your accounts up to date.

Whilst the perception amongst borrowers might be that getting a mortgage if you are self employed is trickier, the truth is that as long as you have proof of income in the forms of signed accounts or tax returns then it should not be any harder than someone who is employed.

What will I need to provide

As standard most lenders will ask for 3 years accounts, whether you are sole trader or a limited company. However there are a handful of lenders who will consider applicants with one years figures, although choices are fewer meaning rates may be less favourable. Lenders will take the net profit or share of net profit for a sole trader or partnership, and normally look at salary plus dividends for directors of a limited company. Self employed borrowers will be subject to the same affordability checks as employed applicants. So any outgoings such as credit cards or loans not paid by the business, child care costs or school fees will be taken into account before working out how much you can borrow.

Self-certification mortgages

A key part of the Mortgage Market Review in April 2014 was that lenders are now required to obtain proof of income on all mortgage applications, effectively ending self certification of income for borrowers.

Getting good advice is key

If you are self employed and looking for a mortgage it’s worth using a good broker, such and London and Country, to help you get the best deal. Lenders assess self employed income in a variety of different ways depending on whether your income has increased or decreased, how your business has been set up and how long you have been trading. Getting professional, fee free advice will help you find the most suitable deal so call us on 0800 953 0304 or 0330 3030 036 from a mobile.



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