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A Guide to Getting a Mortgage for the Self-Employed

Getting a mortgage isn’t always an easy process, and it’s even trickier for the self-employed. With an already difficult task at hand, throw in a pandemic and, you guessed it, things get even more complicated.

However, that shouldn’t put you off from buying a new home. Getting a mortgage when you’re self-employed may be tricker than for those in full-time employment, but that doesn’t make it impossible.

If you’re self-employed and wanting to get on the property ladder, or you’re looking for a new house to buy, this guide will tell you everything you need to know about the process. From how to apply, to whether you should get professional mortgage advice, you’ll feel prepped and ready to go after reading this article!

Mortgages for the self-employed

The reason mortgages are more difficult to obtain for the self-employed is because lenders prefer the reliability of those with a stable income. A self-employed income can sometimes fluctuate every month, making lenders less likely to feel comfortable about lending money. For this reason, self-employed people will usually be asked to provide more evidence about their income to be accepted for a mortgage and, in some cases, asked to pay a bigger deposit.

The newly self-employed

When applying for a mortgage, two years’ worth of accounts is usually required. For those who are newly self-employed and only have one year of full accounts, you will need to speak to a professional mortgage advisor to recommend lenders who may approve your application.

How to apply for a mortgage if you’re self-employed

When someone self-employed applies for a mortgage, they will usually need the following documents:

  • Two years’ worth of accounts
  • A tax year review from HMRC over the last two to three years
  • If you’re a contractor: proof of upcoming contracts
  • If you’re a company director: proof of dividend payments
  • Bank statements over the last three-six months
  • Proof of ID
  • Proof of address

Should you speak to a mortgage advisor?

Getting professional mortgage advice can be extremely helpful for the self-employed. With expert knowledge in the industry, they can make sure that you’re matched with the best lender for you. They will know which lenders are most likely to accept a self-employed application, making the process less stressful and hopefully a bit quicker.

We offer online mortgage advisor services at Mortgages Online, perfect for those who can’t fit face-to-face meetings into their busy schedules. Get in touch with us if you have any questions.

What lenders will want to know

Ultimately, lenders want to know how much you can afford to pay. They will do this by looking at the documents you provide them, as well as asking you further questions about your spending. This can be anything from how much you spend on holidays, childcare, bills, going out and your hobbies. Credit card checks will also be required. They may also question you about any government support you took during the pandemic.

How your mortgage will be assessed

The self-employed will usually be placed into one of three categories that will affect the processing and assessment of your application.

  1. Sole traders – you will need to fill out a self-assessment declaring your income and have HMRC calculate your tax. This will then be submitted on an SA302 form for lenders to use when calculating the amount you can borrow. Lenders will most likely look at your net profit over two-three years, with an average taken from these figures.
  2. Partnership – for those in business with another person, lenders will look at your individual share and profits.
  3. Limited company – if you are a director of a company, both your salary and dividend payments will be looked at by lenders to calculate what you can afford.

It’s not impossible

Yes, getting accepted for a mortgage can be trickier when you’re self-employed. But with the right documents, and with help from professional mortgage advisors, you can certainly bag yourself your dream home with a mortgage you can afford!

We would be happy to help you with any queries you have, and you can even use our website to look at a range of mortgages available for the self-employed. Simply visit our website to start your search.


Jessica Bellingham

As Marketing Manager, Jess works to spread the word of Mortgages Online from the website and social platforms to all digital communication ensuring that all customers, from the moment they search for Mortgages Online in Google to when they purchase a home, have a great experience.

Jess loves to pursue personal development in her own time and is a qualified NLP practitioner. She is also an adrenaline junky and has bungee jumped, skydived, zorbed, water caved, zip lined, been pinged off a cliff, and anything else you can think of (that isn’t to do with sharks!)

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