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When you enter the realm of self-employment, it is common to hear that this means that you are going to find it impossible to secure a mortgage. While there may be a degree of truth to the fact that lenders prefer people with full time employed positions, that is not to say that being self-employed bars you from a mortgage. View our self-employed mortgage guide for best practice advice.
Our guide to self-employed mortgages aims to dispel some of the common myths that exist and to, hopefully, reassure you that securing a mortgage can be done. The first step towards successfully securing a self-employed mortgage is to get the right advice!
Self-employed mortgages are used by those who are self-employed to buy a home. Being self-employed could mean that you are a freelancer, a contractor, or someone who is running your own business. If your income comes from your own efforts as opposed to from employment, then it is a self-employed mortgage that you will need.
If you compare a self-employed mortgage to a regular mortgage, you will see that there is little real difference. One thing to be a bear in mind though is that there are some lenders who are specialists in this area and are likely to offer favourable terms.
Despite the myths that surround self-employed mortgages, the truth is that they are no harder, or easier, to get than a regular mortgage. Just like with a regular mortgage, with a self-employed mortgage, the lender is looking at your ability to maintain your payments. However they are also looking at the sustainability of your income and the type of industry your business is in.
Assuming that you can prove your income and it is sustainable, you are then in the same boat as those seeking a regular mortgage.
Typically, lenders will want to see that you have been self-employed for two to three years. They will also ask to see your accounts to prove that this is the case. There are some lenders who are slightly more flexible and will consider you after trading for nine to 12 months. in these circumstances, lenders will be looking for a strong track record and maybe an accountants reference to show that your income is sustainable.
Assessing how much you can borrowing will involve a lender assessing your income and outgoings and then establishing an amount they feel you can comfortably repay back.
our mortgage calculator will give you an idea of how much a lender will lend to you.
Obtaining a self-employed mortgage while you have bad credit may be more difficult but it is still possible. By approaching the right lenders, you will find that they can be sympathetic to your situation. They will consider how your credit problems arose as well as look at how experienced you are in your industry.
By talking with us, we can run you through all of your options.
The most useful step that you can take is to get in touch with us at Mainly Mortgages. We are the experts when it comes to assisting first time buyers .
A mortgage is a loan secured agains your home. Your home may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.
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Mainly Mortgages Ltd is authorised and regulated by the Financial Conduct Authority under number 923399 in respect of mortgages, insurances and consumer credit mediation activities only.
Subject to circumstances, a fee may be payable. Typically £99 on application & £600 on completion.
If your circumstances or history involves any adverse credit, complex situations or a commercial element then this may increase to a maximum of £2999 with £99 payable upon application. Your adviser will, in all cases, confirm all costs in writing prior to any application being made
