If you are self-employed, finding the perfect mortgage can be difficult. At Mortgage and Insurance Needs, we specialise in being able to find the perfect solution, no matter what your needs may be.
Can you get a Mortgage if you are self-employed?
Updated: 7th January 2021
Covid 19 Update – Following the latest lockdown restrictions, lenders are likely to adjust their criteria in response to the lockdown and inevitable furloughing that follows.
Lenders had adjusted their lending criteria towards self employed applicants before the latest lockdown. Most self employed applicants have been impacted by Covid-19 financially. Whether you’re a builder, personal trainer or makeup artist, it’s likely that your income will have been reduced due to lockdown restrictions in most cases.
Lenders will want to see how you have been impacted before making any decision to lend. If you have not been affected financially by Covid-19, providing you can illustrate this, this will increase your chances of getting accepted.
Due to the changes in lending criteria for self employed applicants, it’s more important than ever to speak to a broker and obtain the right advice.
Most lenders are happy to offer a mortgage if you are self employed, providing you fit their criteria. Most lenders will insist on you having at least 3 years of trading and two years of accounts or self assessments. However, if you don’t, at M.A.I.N, we may still be able to help.
Some lenders will offer special dispensation, depending on the deposit you may put down, combined with your credit rating.
When it comes to being self employed, each lender will treat you differently depending on your circumstances. That’s why we would encourage you to come in and discuss your needs. We can then establish your options and the best route to becoming a first time buyer.
How is a self-employed Mortgage calculated?
As mentioned previously, each lender will treat you differently based on your legal status. If you are a sole trader or partnership, your net profits will be classed as income. In the case of a limited company, the lender will look at both dividends and salary, as well as the net profit of the company.
The issue you may have found with a typical high street lender, they struggle to calculate your income and therefore struggle to agree the correct amount you can borrow.
How to improve your acceptance chances if you are self-employed?
The first points are the same with every circumstance and may seem obvious. You need a healthy deposit to reduce the risk to the lender, a strong credit rating and enough income to cover your mortgage payments.
If you could complete a self-assessment SA302 form, this will help illustrate your income to lenders. Keeping your accounts and electronic records up to date will also improve your chances of being accepted.
If you could reduce the number of credit checks and applications you process before you attempt to get a Mortgage. Another point to be aware of is making more than the minimum payment on any credit card. This will also help illustrate to the lender, that you are not in any financial difficulty.
As we’ve already mentioned above, lenders are constantly changing their criteria at the moment, in response to measures put in place due to Covid 19. This only increases the need for expert advice on the current market. If you are considering purchasing a property in the next 12 months, it’s still a good idea to see a broker and put a plan in place, so that you are in the best position possible.
Book Your FREE Appointment
If you have been worrying about getting a mortgage when self employed, worry no more. Simply, book a FREE appointment and we will find the perfect option for you.
How can our expert mortgage brokers help you get accepted?
This is another perfect scenario of when to use a Mortgage broker, rather than a typical high street lender. We can help find the best option for you and use our established relationships with lenders, to help you get accepted.
Because you apply under our umbrella, it will help improve your application as the lender will consider you as a lower risk. This is because the lender will look at our overall lending as one.
If you are self employed and live on the Wirral, we can use our expertise to help you get on the property ladder. Simply book an appointment with our self employed experts today and see how we can help you.
YOUR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.