Self employed mortgages
Hey there! Are you thinking about getting a self-employed mortgage? Well, let me tell you, it can be a bit of a tricky process. As a self-employed person, you'll need to prove to the mortgage lender that you have a reliable income. But fear not! It's not impossible to get a mortgage as a self-employed person. You just might have to jump through a few extra hoops to prove your income.
Now, let's talk about self-certification mortgages. They used to be a thing of the past, designed for self-employed folks to self-certify their earnings without providing evidence. But unfortunately, they were banned in 2014 due to concerns that people were getting accepted for mortgages they couldn't afford. So, self-employed people now have to apply for mortgages in the same way as everyone else.
But wait, what exactly counts as self-employed? If you own 20% to 25% of a business from which you earn your main income, then lenders will view you as self-employed. This includes being a sole trader, company director, or contractor.
Now, when it comes to getting assessed as a self-employed mortgage applicant, there are different categories you might fall into, each with its own set of requests and expectations from lenders.
If you own a registered limited company, your lender will want to know how much your earnings amount to. If you have business partners, lenders will ask to see proof of your share of the profits. And if you're a contractor or freelancer, you'll likely be classed as a sole trader. You'll need to fill out a tax self-assessment and get it signed by an accountant to certify your income before providing your mortgage lender with an SA032 form.
Basically, the amount you can borrow depends on your income and the size of your deposit. Usually, lenders will pay out around 4.5 times your annual income. But remember, this varies based on your personal circumstances.
So, if you're self-employed, it's a good idea to save up as much as you can for a deposit. This way, you'll have more options when it comes to choosing a deal.
Now, you may be wondering if self-employed mortgages come with higher rates. The good news is, not necessarily! As long as you can provide enough info about your income, you should qualify for the same deal as someone with a similar salary in a full-time job.
In fact, your mortgage rate is more likely to be influenced by the size of your deposit and your credit rating. So, the bigger your deposit and the higher your credit score, the better the rate you're likely to get.
But, if you have trouble getting accepted by a regular bank, you may have to go to a specialist lender that deals with self-employed borrowers. Just be aware that rates might be higher with these lenders.
To boost your chances of getting accepted, you can save up for a deposit, check your credit rating, correct any mistakes on your credit report, and get on the electoral roll.
So, there you have it! Getting a self-employed mortgage might be a bit of a challenge, but with the right documentation and some extra effort, it's definitely doable!
At More Financial, we are committed to providing exceptional customer service. We understand that the mortgage process can be daunting, and our team is here to support and guide our clients through every step of the process. We pride ourselves on our transparency, honesty, and integrity.
At More Financial, we are more than just a mortgage broking firm. We are professionals who are dedicated to making a difference in our clients’ lives. We believe that everyone deserves the chance to achieve their financial goals, and we are here to help make that a reality.
If you are looking for a mortgage broker who will do more for you, look no further than More Financial. Contact us today for your free consultation to learn more about how we can help you achieve your financial dreams.