MORTGAGES
Self Employed Mortgage
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- We offer a comprehensive range of products from across the market but not deals that you can only obtain by going direct to a lender.
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Your home may be repossessed if you do not keep up repayments on your mortgage.
What is a Self-Employed Mortgage?
There is no ‘Self-Employed Mortgage’ and actually, most standard mortgage products are available to Self-Employed applicants.
There is, however, a difference in the mortgage application process, with Self-Employed applicants often having to satisfy additional lender criteria compared to employed applicants. It can also be more difficult to prove your income than it is for those on employed salaries.
How will your Self-Employed application be assessed?
Your mortgage application is assessed predominantly in terms of affordability, you will also need to have a good credit history and be able to provide evidence of your earnings.
Most lenders will require at least two years of accounts (these will need to be certified by an accountant if you do your own taxes), as well as a tax return (SA302) in some cases. Lenders also sometimes have minimum trading period requirements for Self-Employed applicants of two years, on average. However it may be possible to obtain a mortgage with just one years accounts.
What type of business you operate will influence the amount and type of evidence you will need to supply, as per the below:
Sole Trader
Lenders use an average of your declared total net income for a period of two to three years in order to establish an amount to base your loan calculation on. You will need to provide copies of your SA302 forms for those years. Some lenders will take an average whereas others may utilise most recent year if the figures are increasing year on year.
Partnership
As a partner, the size of your share will determine whether you can be classed as Self-Employed for mortgage application purposes. Providing you own at least a 25% share, your application will be considered, using your share of the net business profits to calculate the loan amount. This will then be assessed as above, usually on an average on the last two or three years figures.
Ltd company
Those operating as a limited company should be aware that only personal income is usually taken into consideration for the purposes of the loan calculation. Directors may sometimes submit the business’ net profits in addition to this, however, only specialist lenders will be willing to consider this. Lenders when assessing a limited company director or shareholder of over 25% would often utilise the Salary and Dividend payments as per their last 2 or 3 years tax returns. However some lenders can also consider the applicants share of retained net profit in the business.
How much can I borrow?
Being Self-Employed will not impact how much you’re able to borrow in any other way than how much of your income will be considered by the lender. The loan amount will be based predominantly on your total income amount and affordability and your credit rating.
Ordinarily, a multiple of four and half times your income will be used, although this can vary massively from lender to lender depending on a few factors. Some professions, especially those with higher incomes, can borrow higher multiples of their calculated income. Your credit score can also both positively or negatively affect what multiple of your income the lender is willing to use for their calculation, alongside the size of deposit and Loan to Value ratio.
What deposit will you need?
Lenders tend to be slightly more cautious with applications from Self-Employed lenders and therefore it will benefit you to offer the highest deposit you can comfortably afford.
Whilst there is no minimum deposit requirement for Self-Employed applicants, a minimum of 10% deposit is usually expected from any applicant. If you are able to offer more, it’s useful to know that lenders generally decrease their mortgage interest rates in steps when 10%, 15%, 25% and 40% are offered.
How do you improve your chances of being accepted by a Lender?
Increase your income
Whilst prioritising retaining profits within the business is often standard practice, taking a higher percentage of dividends for a period of time prior to your application, may improve your chances.
As well as increasing your overall usable income, it may give you the chance to save a higher deposit, which can also improve your chance of acceptance.
Delay major business changes
Lenders prefer stable businesses, so if you are planning a restructure, it would be best to delay this until after your mortgage application.
Financial preparation
Ensuring all of your accounts are up to date and signed off by a certified accountant and all tax returns submitted prior to your mortgage application is likely to improve your chances of acceptance. As well as giving a more professional appearance, it will save you time and preparation in the long run.
Taking steps to improve your credit rating as in advance of your mortgage application can also help avoid the disappointment of being refused for a low credit score. Your score can easily be improved through careful spending, staying within existing credit limits and prompt repayment of your accounts.
What help is available?
As specialists with experience in advising Self-Employed mortgage applicants we will anticipate any potential acceptance issues you may have. This allows us to direct you to lenders whose acceptance criteria most closely matches your circumstances. We have access to a range of specialist mortgage lenders, who can often offer more competitive deals than high street lenders.
Applying for a mortgage can be time-consuming, especially for business owners. Another benefit of using Mortgage Matchmakers is that we can reduce the administrative burden of your mortgage application, saving you both time and stress throughout the process.
Your home/property may be repossessed if you do not keep up repayments on your mortgage.
Some Buy-To-Let Mortgages are not regulated by the Financial Conduct Authority.
What fees are involved with buying a home?
Arrangement Fees
Most mortgage lenders charge an administrative fee for the arrangement of the mortgage. This will vary from lender to lender. You may even find that some specialist lenders offer no arrangement fees for those in certain jobs.
Valuation Fees
You will need to have your chosen property independently valued, again, these fees will vary depending on the lender chosen.
Legal Fees
The mortgage application process requires the appointment of a solicitor, who will arrange conveyancing and local authority searches, usually payable directly to the solicitor.
Stamp Duty
Under normal circumstances, Stamp duty is due on the purchase of all properties and is based upon the value of your home, amongst other things. First Time Buyers currently benefit from an exemption on Stamp Duty on purchases up to £300,000.
How can Mortgage Matchmakers help First Time Buyers?
Buying your first home can be intimidating.
From trying to establish which type of mortgage is best suited to you, through to finding a lender offering competitive mortgage rates to First Time Buyers. Qualified and experienced Mortgage Brokers can be comforting and reassuring throughout the process of making life-altering decisions.
Even the most confident buyer, however, can benefit hugely from Mortgage Brokers’ advice. We have a wide market view, which gives us access to mortgage deals that you won’t find on the high street. This means that we can not only find you the most suitable mortgage deals available but are able to divert your efforts towards those lenders most likely to accept your application.
Your home/property may be repossessed if you do not keep up repayments on your mortgage.
Some Buy-To-Let Mortgages are not regulated by the Financial Conduct Authority.
Happy Clients
Sharmila Rumpa2024-05-28Excellent and professional service, wanted to call out Bhavna Gover especially, she helped me to sort out a Ltd Company buy to let mortgage. She's very thorough in her work. Please ask for Bhavna if you need a mortgage in future, she will be happy to help for sure.
Kash Anis2024-05-23We approached Mortgage matchmakers regarding to get an options as we alreday tried few brokers before.Mohit introduced Bhavna which helped us out through out our journey.We felt it was difficult as our situation was bit tricky, but Bhavna worked out the best resoultion and sort this out. We have no words to say thank you, as it was amazing support from Bhavna and got the mortgage offer. Bhavna was fantastic,friendly and very passionate person, she is very professional Mortgage Advisor. Once again I would like to say Thanks so much for helping through out my journey to get mortgage for my new house.
Larushhh O2024-05-18It was a pleasure working with Paul over the last few months with my remortgage. He took away the stress of remortgaging with his professionalism and patience till the deal was finalised. I highly recommend him as a broker. Thanks for your support and help once again.
Aromes Bienmaison2024-05-15Paul was very helpful and provided a great guidance throughout the whole process
Shalaka2024-05-14We couldn't have asked for a better mortgage advisor! Mohit has been an absolute asset, always there when we had a question, and believe me, we had plenty! Being first-time buyers, his guidance was invaluable. What we appreciated most was his honesty and the fact that he never made us feel rushed into any decision. We're still in the process, but we already feel confident with his support. Totally recommend him to anyone in need of mortgage advice!
Dinesh Johnson2024-05-13Mohit was simply brilliant and helped us to understand all the options available in the market and choosing the best and importantly the right product for our need. Mohit is very efficient, he goes out of his way to help his clients and keep his client’s interest at top of his priorities. He was very professional and knowledgeable, would certainly don’t think twice to get his service in the future. I would highly recommend him to anyone who needs advice and support in sorting their mortgages. Thank you soo much Mohit for your hard work and support in sorting our both residential and BTL mortgages! Tharaka & Dinesh
Bagya P2024-04-30If anyone looking for hassle-free mortgage process, then I would suggest to discuss with Mohit. Mohit explained the process more in detail, assessed the situation very well and gave perfect suggestions to get the process done. Also, he closely connected with Solicitor and made the whole process easy. Additionally, I would like to thank Bhavana for her exceptional work. She tried many options to get the better deal from different Vendors. She explained all my queries on time and appreciate her professionalism. Thanks a lot once again Mohit and Bhavana for all your support.
Oliver Harris2024-04-24Mohit was a great help with finding my first mortgage. He talked through all options clearly and found the best deal to suit my needs. I'd thoroughly recommend using his services.
Veronica Ihonor2024-03-03The team was very professional with spontaneous delivery in line with agreement. Well done guys
Ogechi Eke2024-01-14If you’re looking for a professional mortgage broker who actually goes above and beyond his role then look no further. Ankur Daru is your main man. He is extremely helpful and knowledgeable. Even when the interest rate dropped for my lender, without prompting, he sent me an updated deed. There are so much more I could write but I’ll sum him up in a few words: Professional, knowledgeable and helpful. Thank you for securing the deal for me Ankur! I look forward to the next one! Ogechi