Your home may be repossessed if you do not keep up repayments on your mortgage.
There’s now almost 5 million individuals registered as self-employed in the UK (source), and as this figure has continued to rise in recent years so have the number of mortgage applications for the self-employed.
There’s no such thing as a ‘self-employed mortgage’. It’s simply a normal mortgage that you have to jump through more hoops to get than someone who is on a company payroll. There are some factors that should be taken into consideration when applying for a mortgage or a re-mortgage when self-employed, and some things which will improve your chances of getting a mortgage.
Lenders will usually ask for at least two years of proof of income. This can be from HMRC or from accounts. This will give lenders an idea of the affordability of the products they are able to offer you. If you are a contract worker, they will also look at your work history and terms of your contract. Don’t minimise your income too much for tax purposes as it will affect your chances of getting a mortgage.
This Is the form that shows your tax breakdown based on your latest self-assessment submission. Most lenders will want to see up to 3 years of SA302’s so make sure you have these when you apply for a mortgage.
It will massively increase your chances of being accepted for a mortgage if you have a good size deposit or some equity in an existing property.
Proof of future work
If you can prove you have future work lined up, or a record of customers who do repeat business with you it could improve your chances of securing a mortgage.
Good credit history
Lenders will run a credit check on both yourself and your business. If you have any outstanding invoices you should chase them up and sort out any unpaid debts before applying.
Call the Aspire team if you'd like help or advice when getting a mortgage. Call us on 01928 735510, or message us here.