Self Employed Mortgages
Are you a self-employed individual dreaming of owning your own home? At Mortgage and Insurance Needs, we understand that securing a mortgage when you’re self-employed can be challenging. However, it’s not impossible! In this guide, we’ll walk you through everything you need to know about self-employed mortgages.
Self Employed Mortgages Wirral
Last Updated: 21st September 2023
Are you a self-employed individual dreaming of owning your own home? At Mortgage and Insurance Needs, we understand that securing a mortgage when you’re self-employed can be challenging. However, it’s not impossible! In this guide, we’ll walk you through everything you need to know about self-employed mortgages.
Understanding Self-Employed Mortgages
Self-employed mortgages – tailored mortgage solutions for self employed individuals who run their own businesses or work as freelancers. Unlike traditional employees with regular paychecks, self-employed individuals often have varying income streams, which can make the mortgage application process more complex.
Considerations for Self-Employed Mortgages
Income Documentation: When applying for a self-employed mortgage, you’ll need to provide comprehensive income documentation. This typically includes tax returns, bank statements, and financial statements for your business. Lenders want to see stable income and evidence of your ability to repay the loan.
Credit History: Your credit history plays a significant role in mortgage approval. Ensure your credit score is in good shape by managing your debts responsibly and paying bills on time.
Deposit: Saving for a substantial deposit can improve your chances of securing a mortgage. A larger deposit often means better interest rates and lower monthly payments.
Specialist Lenders: Many mortgage lenders offer products specifically designed for self-employed individuals. Working with a mortgage broker can help you identify these specialist lenders and navigate the application process.
Affordability Assessment: Lenders will assess your affordability, taking into account your income, expenses, and any existing debts. Be prepared to provide detailed financial information.
Essential Documentation Needed for Self-Employed Mortgages
When applying for a mortgage as a self-employed individual providing clear and comprehensive income documentation is essential.
Tax Returns: Lenders typically require two to three years of self-assessment tax returns. These documents demonstrate your income over an extended period, helping lenders assess your financial stability.
Bank Statements: Bank statements are essential for verifying your income and financial habits. Be prepared to provide at least three to six months’ worth of statements.
Business Accounts: If you own a business, your business accounts, including profit and loss statements, can be crucial in demonstrating your financial health.
M.A.I.N Your Mortgage Brokers on The Wirral
Navigating the world of self-employed mortgages can be complex, but you don’t have to do it alone. At Mortgage and Insurance Needs, we have the expertise to guide you through the process. Our team of experienced mortgage advisors can help you find the right lender and product tailored to your unique needs.
Don’t let being self-employed hold you back from achieving your homeownership dreams. Contact us today to speak with one of our dedicated mortgage advisors. We’ll work with you to secure a mortgage that fits your financial situation, helping you turn your dream of homeownership into a reality. Simply give us a call on 0151 625 5995 or click to book an appointment.
Self Employed Mortgage Q&A's
How do lenders verify self-employed income?
Lenders verify self-employed income through a combination of methods, including reviewing self-assessment tax returns for the past two to three years, scrutinising bank statements to confirm regular income deposits, assessing business accounts (including profit and loss statements) for business owners, and, in some cases, accepting SA302 forms from HM Revenue and Customs as official income verification.
They may also consider an accountant’s certification, business contracts, and invoices as additional proof of income. Alongside income verification, lenders conduct affordability assessments to ensure borrowers can comfortably manage mortgage repayments based on their income and expenses. Maintaining organised financial records is vital for self-employed individuals during the mortgage application process.
How many years of tax returns do I need for a self-employed mortgage?
For a self-employed mortgage application, lenders typically require two to three years of self-assessment tax returns as part of the income verification process. These tax returns provide a comprehensive record of your income, expenses, and tax liabilities over a specified period, allowing lenders to assess the stability and reliability of your income.
Providing multiple years of tax returns helps demonstrate a consistent income history, which can strengthen your mortgage application. However, specific requirements may vary between lenders, so it’s essential to check with your chosen lender or mortgage advisor for their specific documentation requirements.
How can I improve my chances of approval for a self-employed mortgage?
To improve your chances of approval for a self-employed mortgage, focus on maintaining a strong credit history by paying bills on time and managing debts responsibly. Saving for a larger deposit can make you a more attractive borrower, as can clearing existing debts and reducing your debt-to-income ratio.
Organise your finances meticulously, provide comprehensive income documentation including two to three years of self-assessment tax returns, bank statements, and business accounts, and work on demonstrating consistent profitability if you’re a business owner. Planning ahead and avoiding frequent changes to your financial situation can also enhance your eligibility
Mortgages
It’s not just Self Employed Mortgages we can help with, we can help you achieve your ambitions and arrange a mortgage for many different circumstances.
Below you will see a list of circumstances we can assist with:
Insurances
As you increase your debt, It’s part of our duty of care to ensure that you have the right protection in place, should the worst happen.
Below, you will see a list of insurance options we can help arrange for you.
