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Frequently Asked Questions About Getting a Mortgage When Self-Employed

As of June 2021, around 4.2 million self-employed workers were recorded in the UK. This decreased from its record high of over 5 million in 2020, most likely due to the COVID pandemic. But despite being such a densely populated workforce, getting a mortgage when self-employed can be a lot more complicated than it is for those employed at a company.

The self-employed are usually seen as riskier to lend to as their salary can fluctuate month on month, unlike those in fix-term employment. It makes it difficult to prove your earnings and whether you’ll be able to afford mortgage repayments. However, it isn’t a barrier.

There are plenty of lenders out there happy to help the self-employed get a mortgage. As an online mortgage advisor, we want to help you understand the process of self-employed mortgages by answering all the common questions we receive.

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

Yes! It’s believed that getting a mortgage when self-employed is difficult, and this can be the case. But you’re definitely still eligible. As long as you can provide evidence of your income to assure the lender you can afford repayments, there shouldn’t be a problem getting accepted.

Should I talk to a mortgage broker?

It isn’t a requirement to use a mortgage broker when you’re self-employed, but they can definitely make the task a lot easier. It’s an online mortgage broker’s job to find a suitable lender for your financial situation, which can help ease the stress from your side. They will have contacts who have previously accepted self-employed applications, so their inside knowledge can be very valuable.

Brokers can help you through the whole mortgage process, from managing the application to sorting out the paperwork and offering professional mortgage advice. You also won’t be wasting any time applying to lenders who wouldn’t accept your application, as a broker would only suggest lenders they think you’re suited to. This can help save time and avoid mortgage rejections.

We recommend speaking to a mortgage broker if you only have one years’ worth of accounts when applying for a mortgage. Most high street lenders will want to see two years of accounts, so specialists are needed to help you find a suitable lender for this circumstance.

What will lenders want to know?

Not only will they look at the documents you provide to see how much you earn, but you may be asked about anything from your commuting costs to how much you spend on holidays. They may ask you more in-depth questions to uncover your spending habits. This way they can gather up an image of how much you can afford and how reliable you will be with repayments.

How long do I have to be self-employed?

Most lenders will want to see a minimum of two years’ worth of accounts for self-employed mortgage applications. However, there are lenders out there who will accept applications for those with one year’s worth. If this is the case, you should speak to a mortgage broker who can help you find a lender willing to accept less than two years accounts.

Are there different types of self-employed?

Yes, you could be classed as either self-employed, a partner or a limited company director. There are different rules for each when applying for a mortgage that will affect the process of your application, here’s how it works for each:

Sole traders/self-employed – You will be asked to fill out a self-assessment form to declare your income, with two or three years’ worth of accounts as evidence.  You can do this yourself, but it’s advised to get an accountant to help prepare your business accounts.

Partner – If you’re in partnership with someone else in a business, lenders will look at your individual profit to work out how much you can borrow.

Limited company director – As a company director, although you’re technically employed by your own company, you still come under the self-employed bracket. Your salary and dividend payments will be used by lenders to help calculate what you can afford.

A mixture – If you do a mixture of jobs and work on a contract basis you could fit in with contractor terms. The lender will take your weekly rate and multiply it by 46/48 weeks to see what your average salary would be.

Our very own Managing Director at Mortgages Online, Andrew Montlake, spoke to The Times about his experience with self-employed mortgages: “I have just arranged a mortgage for a celebrity who has both their own business and various freelance and PAYE contracts from several different sources, some one-off speaking engagements and others recurring. A professional broker is essential in working with the lender to package the case in a way that underwriters can understand and get comfortable with.”

What can I do to boost my chances?

If you know you’re going to be applying for a mortgage soon, there are a few extra steps you can take to make your application more ideal for lenders. We suggest the following:

  • Save as much as possible; the bigger the deposit you have, the more likely you are to be accepted.
  • Sort out your credit rating.
  • Get an accountant.
  • Speak to a mortgage broker.

If you want to find an online mortgage advisor to help you with your self-employed mortgage application, Mortgages Online would be more than happy to help. For further information, read our full guide on getting a mortgage when self-employed or get in touch with us directly by giving us a call!


Laura Waller

Laura Waller has been working in the mortgages industry since 2013, joining an independent brokerage in Essex. Laura has CeMAP 2 & 3 – Certificates in Mortgages Advice and Practice. Since then Laura oversees marketing for Mortgages Online, using her experience and expertise to write articles and blogs about mortgages and related topics.

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