There are quite a lot of myths floating around when it comes to trying to get a mortgage. One of these is that it is incredibly difficult, or even impossible, to be approved if you are self-employed. It might be slightly more challenging to get approved for a mortgage, but there are some steps you can take to improve your chances.

Improve your chances of getting accepted for a mortgage when self employed

It isn’t just a numbers game when it comes down to being approved for a mortgage, a lender will look at a wide range of factors before accepting you.

Here are some of the key things you can do to improve your chances:

● Improve your credit score
● Make sure you’re on the electoral roll
● Stay well away from payday loans
● Be careful with your credit card – don’t let it hit its maximum, but also be sure to pay off more than the minimum each month.

Who can help you get a mortgage?

A mortgage adviser will be able to help you with the process of buying a home. If you feel like you don’t earn enough or haven’t been trading long enough to be approved, the best thing to do is speak to a good mortgage adviser to weigh up your options.

If you struggle to get accepted by mainstream lenders, you might benefit from getting the help of a specialist broker. They will have experience in your exact situation and know how to go about negotiating with banks and building societies to find one who is willing to offer a good rate to a self-employed borrower.

What will you need to apply for a mortgage?

The main issue with getting approved for a mortgage while self-employed is regarding proof of income. As self-employment naturally has fluctuating income, you will need to show consistency in your finances in order for the lender to approve you.

If you are self-employed then a 5% deposit might not be enough to secure a mortgage. A larger deposit is a start but you’ll likely have to provide a fair bit of additional information. A quick breakdown of what you might need can be seen below.

Sole trader – you’ll need one year of finalised accounts or an SA302 dated less than 18 months from HMRC
Limited companies – if you are the director, you will have to provide your latest accounts as well as your personal tax return
● Contractors/Freelancers – If you are working as a regular contractor you will need to supply your current contract as well as your financial records.

However, these are minimum requirements. In most cases, lenders will prefer up to three year’s worth of accounts to show.

You’ll also need to make sure that you have all the relevant documents at hand when applying. These can include the following:
● Proof of ID
● Proof of address
● Personal tax returns
● Bank statements

Finding out halfway through the process that you are missing vital information will only slow the process down, likely costing you more money in the meantime.
Make sure you do your research and get professional advice if you’re unsure of anything. Being rejected for a mortgage can end up becoming a problem on your credit record if you’re not careful, which can harm your chances in the future!

About The Author

Christopher Jones

Forensics graduate-turned copywriter and blogger. I love turning complex topics into easy to understand, yet engaging pieces of content.

Read more posts...

Who Should Business Owners Tell About a Change of Address?

If you run your own business and your personal or trading address changes, you’ll need to let people know. We’ve compiled a…

Read More

Using the Holiday Season to Start the Hiring Process

The end of one year and start of another is a natural turning point for many people. It’s a time where people…

Read More

How to Keep a Remote Team Motivated (and Productive)

There are many reasons why so many businesses opt for a remote team these days. Some businesses simply don’t have the office…

Read More
Back to Blog...