A large myth suggests that because you are self-employed,
you will find it harder to get a mortgage. Maybe that was so a few years ago,
but not today.
Yes, the financial crash took its toll on the self-employed
and quite rightly killed off the ‘self certification’ type deals (no proof of
income). But today lenders are quite
happy to lend to those who are self-employed and have a good track record. The majority of lenders require two years
accounts and will tend to average your last two years figures. However, there are also some lenders who will
look to assist you even if you are in your first year. Some will also consider just last year’s
figures, even if you have been self-employed for longer.
Generally, the longer you’ve been self-employed and
the more years accounts you have, the larger number of lenders you will have
who are willing to assist.
Some lenders do not require to see your full accounts
but will require an accountant’s certificate to be completed. This differs lender to lender. Some will
require a full set of accounts and/or an accountant’s certificate! Some will require this and/or tax year
overviews and more. All can be requested
via HMRC.
They may also require to review business bank statements
to review day to day cashflows and possible projections for future income,
including potential contracts, etc.
This can also change depending on the make up of
your self-employment, whether a sole trader, partnership, Ltd company director
and so on.
Deposit requirements can range lender to lender,
but the bigger deposit you have, the greater the number of deals will be
available to you.
Finally, plan ahead. Six months ahead of your mortgage
requirements, make sure you have your house in order. Check your bank statements are in good order,
check you have the right accounts and relevant paperwork from your
accountant. Don’t have too many credit
searches in a short amount of time as this could affect your credit score. Ensure you are on the electoral role and have
decent breathing space on card limits and loans. All of this should put you in a good position
before the lender even looks at their ability to lend to you!
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