Expert Guidance Every Step of the Way
Your property may be repossessed if you do not keep up repayments on your mortgage.
Eligibility Criteria for Self-Employed Mortgages
To secure a mortgage as a self-employed individual, most lenders require at least one year of trading history, though high street lenders often ask for two or three years. Some specialist lenders, accessible through brokers, may consider just one year of accounts, especially if you remain in the same trade.
For example, transitioning from being employed as a mortgage advisor to self-employment in the same role may qualify you for a mortgage after only one year. In the construction industry, contractors under the CIS scheme may also have additional options, though the standard rule is a minimum of one year of accounts.
FAQ'S
Can I get a mortgage as someone who is self-employed and a First Time Buyer?
The simple answer is yes you can. The same mortgages are available to the self-employed and employed. Over the years people have been nervous of the barriers to self-employed people, but just come to a broker. It’s absolutely fine.
How does getting a mortgage as someone who’s self-employed and a First Time Buyer work? Is it more difficult?
It has been difficult, especially through Covid, and there are still a couple of lenders that have extra checks in place.
In terms of how it works, it’s the same process as for somebody who’s employed. Lenders just use the income in a slightly different way. It’s not difficult – and certain lenders are better than others. A good broker knows where to go to make life easier.
How Lenders Calculate Borrowing for the Self-Employed
When calculating how much you can borrow, lenders typically average your income over the past two years. If your income fluctuates, they may use the lower figure to determine affordability. A steady or increasing income trend is advantageous as it demonstrates a stable and growing business.
Brokers can advocate on your behalf, often directly engaging with underwriters to explain your financial situation. Unlike banks, brokers have access to a wider range of lenders and can explore various options tailored to your unique circumstances.
The Role of Brokers in Securing Self-Employed Mortgages
A broker is invaluable for self-employed First Time Buyers, especially those with complex credit histories or fluctuating incomes. Brokers provide personalised advice, help improve your credit profile, and create plans to address obstacles, like low credit scores or insufficient accounts. With access to specialist lenders, they increase the chances of approval even for those with bad credit or unique situations. Starting early and maintaining organised finances will position you well to navigate the mortgage process successfully.
Vulnerable Customer
We understand that from time to time our clients may find themselves dealing with circumstances which could mean they are potentially vulnerable. For example, a change in health, caring for a family member or coping with the loss of a loved one. There are many different types of vulnerability, and what makes one person vulnerable might not affect someone else. When we are vulnerable, our need for financial advice may change. However, admitting vulnerability or seeking help can sometimes feel hard.
If this is something you would like to discuss with us, please ask for a copy of our support guide or download a copy here. This guide is designed to help explain vulnerability and the ways in which we might be able to support you. If you feel any of the circumstances in the brochure apply to you, please talk to us.
