Can I get a mortgage if I’m self employed?

Q: I am self employed. Can I get a mortgage? Our expert mortgage broker explains some of the issues...

 

Lenders will certainly offer mortgages to self employed borrowers and at exactly the same rates as they would employed customers.

Where it can be tougher for the self employed is in providing the right documentation for a lender to prove their income. They will need to show a track record of their income and that means providing as much as 3 years of accounts or self assessment figures (SA302), although many lenders can consider 2 years.

Self certification mortgages were developed for self employed that did not have the required proof of income. However they were a product that was abused leading to them being tagged as ‘liar loans’. They were withdrawn following the onset of the credit crisis and the implementation of the Mortgage Market Review requires that all applications must be backed by proof of income, confirming the demise of self cert.

That makes life difficult for those that have only recently gone self employed and have yet to build a sufficient track record. However there are some lenders that can consider as little as one year of accounts, especially if backed by a good credit score and a large deposit.

It’s therefore worth looking at what proof of income you do have and seeking advice to see what the options might be.

For more advice on getting a mortgage when you are self-employed, see our full Self-employed Mortgage Guide

David Hollingworth, London & Country Mortgages

 

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