Self Employed Mortgages

In order to get a mortgage you must prove that you are financially sound and can keep up the repayments. If you are self employed or on a short term contract it can make it hard to prove this.

You are usually required to have at least 3 years accounts as proof that you have done well in your business and therefore you would be minimal risk to a lender. You will have wage slips as proof of earnings if in full time employment, with full time employed people lenders feel they are taking a smaller risk. The way that lenders look at it is: that if you are self employed you have many things to consider, such as you will have to ensure you get paid for services you supplied to your customers, running around chasing payments. Maybe you are working on a contract, but what happens when that finishes will you have another contract to go to. Lenders are looking for proof that they will get full repayments on time for the term of the mortgage.

If you are self employed then your accountant might have minimized the amount that you declared for tax purposes. Your downfall could be having a good accountant when looking to apply for a mortgage, as in trying to do the best for you your account may have played down your profits, this could mean that when a lender looks at your accounts the assessment of how much can borrowed could be based on an income that doesn’t reflect your actual ability to pay.

However lenders have become more flexible they have realized that self employed people will have their ups and downs with their income and they try to accommodate this.
If you are having a problem with proof of earnings there are other ways to get a mortgage and one of those is self certification. See our section on self certification mortgages.

At PeopleFinance.co.uk we can help you find a Self Employed Mortgage, an independent financial processor will aim to get you the best deal to match your credit circumstances.

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Related glossary terms to Self Employed Mortgages:
Adverse Credit | Arrangement Fees | Homeowner | Defaults | Arrears

Related Self Employed Mortgage Products:
Self Employed Remortgage | Self Employed Mortgage

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