Can You Get A Mortgage If You Are Self Employed?


Yes you can get a mortgage if you are self employed and the terms of the deal will be exactly the same as if you were employed. However getting a self employed mortgage can and usually is hard work, as a little bit more planning is sometimes required. However the good news is, it doesn’t have to be, provided you follow these top tips. Read on to find out more. 

If you are self employed or considering going self employed and wondering what mortgages for self employed people are available to you the good news is all of them.CLICK TO TWEET

Why being self employed makes no difference to mortgages

Being self employed in itself does not restrict you getting a mortgage but your circumstances might! I’ll come on to that later.

However the process of getting one can be harder.CLICK TO TWEET

Its usually a good idea to speak to an independent mortgage broker like us who is used to getting mortgages for self employed people.

An independent mortgage broker can be invaluable and help with the complicated process and make sure it runs smoothly, after all self employed mortgages are not always straight forward!

If you are looking for a self employed mortgage the crucial first step is to get all your paperwork up to date and ready. to give you an idea, the typical types of documents are:

  • Accounts – ideally 3 years, however some lenders will except 1 or 2 years depending how long you have been trading
  • SA302’s for the last 3 years – more on that later!
  • Bank statements
  • Photo ID
  • Evidence of your address
  • If you are buying an investment, then proof of your deposit is required

But remember lending rules are all very different from lender to lender, plus things can change. Always make sure your mortgage adviser, thoroughly researches your mortgage with all of the correct documents.

If they only give you a rough idea, without looking at your documents, remember it will only be a rough idea! This is only so good, and things can look vastly different between a rough idea and the reality! So make sure you know exactly what you can do, before you dive too deep!

Being self employed you need to plan!

Change of circumstances matters when it comes to getting a self employed mortgage!

Be careful or at least be aware that a change of circumstance in your business, situation or role can have huge repercussions.

If you are employed and thinking of going self employed, once you do, don't expect to get a mortgage any time soon.CLICK TO TWEETMost lenders will want to see you trading for at least 2 years, however there are lenders that will look at you after 1 full year of trading.

Why changing to a Ltd company matters for mortgages?

If you go from a sole trader/partnership to a Ltd company this may or may not have issues when getting finance.

It usually depends on whether the fundamental structure has changed, such as, key people or the business itself!

Without proper foresight it could mean you have to wait a while before getting a mortgage, which with a bit of planning you might have been able to avoid! So make sure you plan before doing anything.

The importance of planning ahead for mortgages!

Plan your business and your accounts properly as different lenders will be looking for different things.CLICK TO TWEET

For Ltd companies some lenders may only be interested in your salary and dividends, while other lenders may also look at your balance sheet, net profit before tax and net profit after tax.

It is really easy for someone to misinterpret a set of accounts only then to get rejected by a lender. The key is to work with experienced mortgage brokers who have experience of self employed mortgages to avoid these pitfalls.

My self employed mortgage top tips!

There are so many more things to consider being self employed and it’s hard enough just running a business right? Although the choices and options for mortgages, are not restricted, the reality is, you do need to plan ahead and think about what you maybe doing in the future.

So here are a few thoughts and mortgage tips I wanted to share with those of you who are self employed:CLICK TO TWEET

  • If your latest set of accounts have not been finalised yet, this is the perfect opportunity to speak to a broker (particularly a specialist self employed mortgage broker) to see how your tax planning might have an effect on your capacity to get a mortgage and the amount you can borrow.
  • Once your accounts are finalised, that is it for another year! So if you haven’t planned, don’t assume everything will be okay!
  • Get your accountant working closely with your mortgage broker – this could save you time, money and importantly avoid disappointment of not being able to do what you had hoped.

For those of you who have taken the time to read my blog, I know you will realise the importance of planning ahead. I know from experience that it makes all the difference.

Good luck with you planning, and of course, if you need to bounce ideas of what you can do on the mortgage, feel free to get in touch with the team at Barr Financial.

Ask a Question

(01237) 472321
What is...

Thank you

We'll be in touch as soon as we can.