Self-Employed Mortgages

Self employed mortgages don’t have to be difficult. With the right guidance and support, individuals can buy or remortgage without the stress.

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What is a self-employed mortgage?

Regardless of whether you’re a freelancer or run your own business, there’s a wide range of mortgages for self-employed people available in the UK. However, instead of there being a specific set of mortgages called ‘self-employed mortgages’, the only difference between standard mortgages and self-employed mortgages is the amount of evidence you need to provide. For self-employed workers, this often includes two to three years’ worth of accounts of your earnings, future earnings, and taxes. While many mortgage lenders do offer self-employed mortgages, they may have a more limited selection of deals for borrowers to choose from.
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Why choose UKMC for help finding a self-employed mortgage?

  • Over £450m lending secured for our clients
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  • Straightforward mortgage advice
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  • We’ll be with you through to completion
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Things to consider

What are the benefits?

Unlike employed borrowers, self-employed borrowers can use their projected earnings to boost the amount they can borrow for a mortgage.
When determining the income of a company director, lenders will consider either their salary and dividends or their salary and net profit. As a result, there’s far more flexibility when it comes to the amount you’ll be allowed to borrow.
You can also boost your budget by exploring certain innovative schemes that are available to help increase your borrowing power. Get in touch with the expert UKMC team to learn more about these schemes and how we can help.

What are the risks?

To accurately assess your income and affordability, mortgage lenders often need at least two to three years’ worth of accounts. You’ll have to provide them with a significant amount of evidence to support your stated income and you may be offered less than if you were employed elsewhere. Depending on the lender’s criteria, you could also be asked for business and personal bank statements, projected income figures, and future business plans.
Some mortgage lenders will save certain mortgage deals and buying schemes, like 5% deposit mortgages, for employed borrowers only. This means your options are more limited.

Just like providing income evidence, you may also be asked to provide tax evidence in the form of a Self Assessment Tax Calculation (SA302) form or HMRC tax year overviews and tax year calculations.
To learn more about self-employed mortgages and how UKMC can help, please don’t hesitate to complete our call back form today!

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Frequently asked questions

Though there’s no legal definition of being ‘self-employed’, you are generally considered self-employed if you own your own business and are responsible for its success of failure. This is known as being a sole trader. For an assessment of whether you’re classed as self-employed, we recommend exploring the government’s step-by-step guide to working for yourself.
To determine whether you can afford the property you want to buy, mortgage lenders will need to look back at the past two to three years of your bank statements and tax returns. In some cases, they will accept a year of evidence if you haven’t been self-employed for very long.
Typically, mortgage lenders will allow you to borrow 4.5 times your annual salary if you want to secure a self-employed mortgage. While some mortgage lenders will allow you to borrow more, sometimes up to 5.5 times your annual salary, this is dependent on affordability and your individual circumstances. If you have adverse credit or a more complex self-employment history, these deals may not be available to you.

If you work for yourself or are a limited company director, then lenders will analyse both your salary and your share of the profits to determine your affordability. Net profits are considered gross income as this is before personal tax and national insurance has been deducted.

As the process for applying for a self-employed mortgage is more complex than securing a traditional mortgage, it always helps to have an experienced mortgage advisor on your side. To find out more about how we can help, feel free to complete our call back form today! While we’re confident in our down-to-earth approach and ability to expertly guide our customers on the road to home ownership, don’t just take our word for it – explore more than 400 positive customer reviews for UKMC on Trustindex.

How to apply for a self-employed mortgage

01

Contact a qualified
accountant

Obtaining mortgages for the self-employed in the UK is more complex than salaried employees applying for the same mortgage. This is why a consultation with a qualified accountant is essential if you want to ensure your accounts are in order.

02

Boost your deposit and credit score

If you want to be seen as more attractive to lenders, then spending a little more time saving for a deposit and improving your credit score can make a difference. This will reassure lenders that you’re less of a risk.

03

Gather necessary evidence

To be able to demonstrate your affordability, you must gather evidence, typically two to three years’ worth of accounts, of your earnings, future earnings, and taxes. Lenders will often ask for your SA302 forms as evidence of your self-employed income.

04

Contact a
mortgage advisor

The evidence you need to provide to a lender will not only vary depending on your self-employment arrangement, but also upon the lender themselves and their eligibility and affordability criteria. As a result, it’s always advisable to contact an experienced mortgage advisor, like UKMC, to discuss your options and receive expert support with choosing the most appropriate lender and deal to suit your specific circumstances.

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UK Mortgage Centre Limited is an Appointed Representative of Refresh Mortgage Network Limited. Refresh Mortgage Network Limited is authorised and regulated by the Financial Conduct Authority. We are entered on the Financial Services Register under firm number 1019794. 

As a mortgage is secured against your home, it could be repossessed if you do not keep up the mortgage repayments. The Financial Conduct Authority does not regulate some forms of buy-to-let mortgages. 

The Financial Conduct Authority does not regulate will writing and taxation and trust advice.

You may be charged a fee for your advice. A typical fee is £495, which would be payable when you receive your mortgage offer. Your dedicated advisor will discuss this further on your free initial phone call.

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