Navigating the Self-Employed Mortgage Maze

Wonder if being self-employed makes securing a mortgage hard. It's not an impossibility. However, proving a reliable income may require a few extra steps when talking to lenders.

Remember the "Self-certification" or "Self-cert" mortgages? They were designed for self-employed folks to self-declare their income, with no evidence required. But that ended in 2014 over concerns of folks being approved for mortgages they couldn't shoulder.

Today, being self-employed and seeking a mortgage means following the same rules as everyone else. You are seen as self-employed if you own more than 20-25% of a business, which could make you a sole trader, company director, or contractor.

What's the key to being accepted for a mortgage as a self-employed individual? Having well-kept books and the assistance of a specialist mortgage broker who understands your unique needs.

Are you self-employed, need a mortgage, and have the same lending options as salaried folks? Bear in mind without an employer vouching for your wage, you'll need to provide more income evidence. So, what do you need in your arsenal for a self-employed mortgage? Here's a quick guide:

• 2+ years of certified accounts

• SA302 forms or a tax year overview for the past 2-3 years

• Evidence of upcoming contracts

• Evidence of dividend payments or retained profits

• Plus, personal documents like passport, driving licence, proof of address, bank statements, proof of savings accounts

Being self-employed won't stop you from getting a mortgage as a first-time buyer or when planning to remortgage an existing property. The trick lies in showcasing healthy self-employed income accounts, enhancing your credit scores, and making regular payments.

How much can you borrow when self-employed? It often depends on your income and your deposit size. Generally, lenders might offer around 4.5 times your annual income. But, the more you can afford a deposit, the more options you might have when selecting a mortgage deal.

Confused? Don't be. We're here to guide you every step of the way by comparing 1000s of mortgage products covering the entire market. Get in touch today.