Getting a mortgage while self-employed has its own challenges, but we believe that being your own boss should never be an obstacle to getting onto or moving up the property ladder.
When it comes to a self-employed mortgage, our expert team of advisors are on hand to help you find the best self-employed mortgage lenders for your personal situation.
Millions of people in the UK are self-employed, and with the added flexibility and control it can provide, self-employment is set to keep rising. However, many self-employed people often believe they’ll struggle to get a mortgage as a result. Let us assure you that this isn’t the case. While there’s certainly additional challenges and requirements to getting a mortgage while self-employed, we are here to help you every step of the way and find the best self-employed mortgage lender for your personal situation.
A self-employed mortgage is identical to a normal mortgage – the big difference just comes in the application. As a self-employed person, you will have to provide extra documentation and information to prove your income in order to pass the lender’s affordability tests. At Derbyshire Mortgage Services, we are here to guide you through this process, offering fee free advice as your self-employed mortgage broker and making sure you have everything in order to get the best possible deal. Advance preparation is key to being accepted for a self-employed mortgage, so even if you’re just considering your options, why not give us a call to discuss your situation further? Our advice is always free!
With over 100 years combined experience in arranging mortgage policies and products for all situations, find out a little more about us here and how we can help find you a self-employed mortgage.Find out more about our team
If you’re looking for more specific guidance for contractors as part of your self-employed mortgage, we have a handy information page here to help you further.More about contractor mortgages
Stamp Duty Calculator
Don’t forget stamp duty! A self-employed mortgage means your affordability will need to be water-tight before application. Our stamp-duty calculator can help you work out how much SDLT you might owe.Find out what you might pay
"What amazing personal and friendly service we received from Laura at Derbyshire Mortgage Services. They took all the stress out of getting a mortgage for a new home we wanted to buy. No spending hours at banks waiting for phone calls and having interviews and providing information – Laura did it all for us. We will use them again without doubt, and could not recommend their service enough. Don’t waste time trying to do it yourself – go to the experts, we are totally delighted. Thank you Laura so much.”Michele and Nigel
“If you have an unusual set of circumstances whereby a straightforward mortgage may not be on offer, Derbyshire Mortgage Services excel at finding you the right product to meet your needs at no extra cost and with no added hassle. I would never use another company for business or personal circumstances.”Dawn
"As a self-employed person, you have made the hardest part of finding a home much easier to say the least. Your advice and expertise has helped to give me a new start. Thank you."Edward
1. How are Self-Employed Mortgages Different?
The mortgage product you receive as someone self-employed is no different to that received by someone employed by a company – the difference is in the application. Getting a mortgage while self-employed means you have to provide more evidence of your income, as self-employed mortgage lenders will assess income in different ways to check you meet their affordability.
2. Proving Your Income
For a self-employed mortgage, you usually need 2-3 years of accounts prepared by an accountant, your tax computations and tax year overviews (formerly known as SA302 forms), bank statements, proof of deposit and details of all outgoing funds and debt repayments. If you don’t have 2-3 years of accounts, don’t worry! With a strong track record, we can often help with just 1 year.
3. Making Things Easier
Applying for a self-employed mortgage can be challenging but there are ways to make the process easier. Ensuring your deposit is ready, your credit score is at its optimum, and all of your documents and finances are up to date will help the process to run smoothly. Advance preparation is really important, so please get in touch for fee free advice on the requirements for the best deals.
4. What Counts as Self-Employment?
A self-employed mortgage lender will consider you to be self-employed if you own more than 20% of the business that provides your main income. You could be a contractor, a sole trader, involved in a partnership or director of a limited company, and your income may be comprised of both a salary and dividends.
Self-Employed Mortgage Help!
Do you still have some questions about self-employed mortgages? You might find the answers you’re looking for here, but if you still want further information, just call us – it’s free!
Is it harder to get a mortgage if you’re self-employed?
There are additional challenges to getting a mortgage while self-employed as you need to demonstrate reliable income. There are many different ways to do this, however, so it’s certainly not impossible! Being prepared well in advance will make the process far smoother, so do get in touch with our friendly advisors for their advice. The advice is always free!
What counts as self-employed?
A self-employed mortgage lender will consider you to be self-employed if you have a 20% or higher share in the business that provides your main income. This income can be comprised of both salary and dividends and applies to you whether you’re a sole trader, company director or contractor.
What is a self-certification mortgage?
Self-certification (or ‘self-cert’) mortgages were designed for the self-employed to allow them to self-certify their annual income without needing to provide evidence. Following the financial crash, these were removed in 2014 over concerns that unaffordable mortgages were being provided by self-employed mortgage lenders. Now all lenders require proof of income.
How are self-employed mortgages different?
The mortgage products available to someone who is self-employed and someone employed by a company are identical, but the application process contains some differences. A self-employed person will need to prove they have a reliable income and provide additional information and documentation.
Will my self-employed mortgage have higher rates?
As long as you can prove your income is reliable, your mortgage rates should be identical to someone with a similar salary in a permanent, full-time job. Your mortgage rate will primarily depend on your credit rating and the size of your available deposit. Our advisors can help you prepare for your application well in advance to ensure you get the best rate possible, so do get in touch for their fee free advice.
What do I need to provide for a self-employed mortgage?
In addition to all of the usual documentation you would need to provide in a mortgage application, a self-employed mortgage lender will usually need 2-3 years of accounts assembled by an accountant, your tax computations and tax year overviews (formerly known as SA302 forms), and clear details of all outgoing payments and outstanding debt repayments. If you only have 1 year of accounts, don’t worry! With a strong track record, we should still be able to help you find a suitable mortgage.
How can I improve my chances of getting a mortgage while self-employed?
As with any mortgage, the best ways to improve your chance of acceptance are to have as large a deposit as possible and a good and accurate credit rating. Being on the electoral roll is also an advantage, and avoiding properties above commercial premises or old and unusual properties will help too as lenders are less willing to lend for these types of property.
For self-employed mortgages, we highly recommend being prepared well in advance. Even if you’re just considering your options, do get in touch with one of our advisors – their advice is always free!
What are common problems in getting a mortgage when self-employed?
The most common problem in getting a mortgage while self-employed is only having one year of accounts or a sudden large increase in income. Not all self-employed mortgage lenders find this a problem however, so please get in touch for fee free advice if you want to understand all of your options.
How much can I afford?
This will vary depending on your circumstances – you can use our mortgage calculator as a rough guide but please call us for free if you’d like a more accurate figure.
Is there a minimum income I need to make to get a mortgage?
There is no minimum income required to qualify for a mortgage, but lenders will use affordability tests that typically require an income of at least £10,000 per year in order to borrow a significant sum at a good rate.
Can I get a self-employed mortgage if I’m a first-time buyer?
Yes! There will still be the same challenges of proving your income, but whether this is your first or your tenth house we will be able to help you find the best mortgage deal for your circumstances. Take a look at our First-Time Buyer page for more information on what you will require as a first-time buyer, or call us for free for advice more specific to your situation.
I’ve become self-employed since taking out my current mortgage – how will this affect my remortgage?
You shouldn’t be penalised for becoming self-employed as long as you can prove a reliable income. If you have 2-3 years of accounts available then the full market should be open to you, but with just 1 year and a good track record we should still be able to find you a deal with a self-employed mortgage lender.
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