You may be wondering how to get a mortgage if you’re self-employed or a freelancer. It’s true that there may be a few more hurdles to jump over, but as long as you have the necessary affordability and credit health, there should be plenty of mortgage options available to you. The key to jumping those extra hurdles is to seek help from a specialist self-employed mortgage broker. Being self-employed comes in many different forms and a self-employed mortgage broker will understand which lender is most suitable for your situation. They’ll also guide you through the application process, including the parts that are specific to self-employed applicants. In this guide, discuss how to get a mortgage when self-employed, how a self-employed mortgage broker can help you, and the things to look out for when choosing your mortgage broker.
Can I Get a Mortgage if I’m Self-employed?
Whether you’re a freelancer, contractor, sole trader, director or other type of self-employed person, you shouldn’t be deterred from getting on the property ladder. There are over 5 million self-employed workers in the UK, many of whom own a home with a mortgage. In fact, technically, there is no such thing as a self-employed mortgage – as long as you can prove your income, affordability and credit health, you should have most of the same mortgage options as an employed person. Being accepted for a mortgage as a self-employed worker will partly come down to your choice of lender. You’ll also need to complete your application in the correct manner to meet that lender’s criteria. Aside from the High Street lenders, there are also specialist self-employed mortgage lenders that may be suitable for your situation, and your advisor will be able to determine whether one of these is the right option for you.
How a Self-employed Mortgage Broker Can Help You
If you want to get a mortgage as a self-employed person, the first thing to do is get the right advice. It’s important you approach a lender who’s likely to accept your application, and your advisor will understand which lenders are most suitable. This is important because if you were to be rejected, your credit score could be damaged, which could make getting a mortgage more difficult. Also, different lenders assess self-employed income in different ways, which can mean that you’ll be able to borrow more from one lender than you would from another. Our self-employed mortgage brokers have access to products from across the market and we understand the criteria of each lender. This means we’ll be able to recommend and apply for the most appropriate mortgage product for your circumstances.
Another crucial aspect our self-employed mortgage advisors will help you with is creating your application. One of the main mortgage worries of self-employed workers is not being able to provide suitable proof of income and affordability. Our advisors will assess your situation and then specifically address four key areas to maximise your chances of success. You don’t have to prepare anything before speaking with us, but having information regarding the following points to hand may be helpful.
Past Income
Ideally, you’ll have at least two years’ worth of accounts to prove your self-employed income. If you have less than this or if your income is inconsistent, don’t worry, there may still be options available to you through a specialist lender. Your advisor will be able to assess all your options during your initial meeting.
Future Income
Certain lenders may ask for documentation demonstrating your future income, and even those that don’t specifically ask for this may be more willing to lend to you if you can provide evidence of stable employment opportunities. This could include having established contracts or ongoing retainer agreements with clients, which can instil greater confidence in the lender regarding your ability to meet repayment obligations in the foreseeable future.
Credit Score
Having a good credit history is always a positive when it comes to borrowing and self-employed mortgages are no exception. Having said that, if you do have poor credit, we may still be able to help you. There are specialist lenders who accept self-employed applicants with bad credit as long as other criteria are met. We can look at your credit score risk-free without doing a full credit check, but if you want to look into this yourself prior to talking to us, we recommend using Check My File.
Deposit
In general, the larger your deposit the more mortgage options you’ll have available to you. This is because a larger deposit can decrease your Loan to Value, which also decreases the risk to lenders. Therefore, having a larger deposit can help to offset other areas such as poor credit or proof of income. That being said, if you’re wondering how much deposit you need as a self-employed person to get a mortgage, the minimum is usually considered to be 5%.
How to Choose a Self-employed Mortgage Broker
We discussed above some of the reasons for using a mortgage broker if you’re self-employed and how to prepare for your meeting, but now let’s talk about what to look for when choosing a self-employed mortgage broker. Some mortgage brokers will be better placed than others to deal with your case, so have a read of the following points to look out for when choosing your advisor.
How Familiar Are They With Self-employed Mortgage Applications?
As we’ve discussed, the approach to getting a mortgage as a self-employed person is different to that of an employed person. Lenders also assess self-employed people in different ways, especially regarding their proof of income and affordability. For these reasons, it’s important to choose a mortgage broker who has experience dealing with self-employed applicants. At Michael Usher Mortgage Services, we’ve been successfully arranging self-employed mortgages for over 30 years!
Do They Have Access to a Range of Mortgage Lenders?
A variety of property development finance options are available, each one catering to different project requirements. Some popular options include ground-up development finance, short-term bridging finance, heavy refurbishment finance, light refurbishment finance, and development refinancing. We can help you choose the right type of development funding for your project by assessing your specific needs.
Will You Be Able to Speak to a Real Advisor in Person?
Getting a mortgage as a self-employed person can be daunting. Online mortgage brokers can be impersonal and leave you feeling like you’re on your own. At Michael Usher Mortgage Services, we can still handle your application remotely if you wish, but we offer a personal, hands-on experience with a dedicated advisor who will be there for you every step of the way. We also work out of an office on Frimley High Street that you can visit Monday – Saturday if you wish to speak to your advisor in person. We’ll keep you updated regularly and make sure you understand everything. Knowing you can reach out to your advisor easily whenever you need to makes the experience much less frightening!
Do They Provide a Paraplanner to Help Speed Up Your Application?
Applying for a mortgage can be a lot of work, especially if you’re buying a new home. Mortgage advisors are busy and those companies that don’t have paraplanners can sometimes struggle to keep up, which can lead to delays and frustration for their clients. With us, you’ll get a dedicated paraplanner who’ll work with your advisor to make sure your mortgage application goes smoothly. This includes handling all the admin, liaising with your lender, estate agent, and solicitor, and keeping you updated throughout the process.
Do They Have the Appropriate Qualifications?
It’s important to choose a mortgage advisor who is CeMAP qualified. CeMAP is a highly respected qualification in the mortgage industry. It’s recognised by the Financial Conduct Authority and gives advisors the knowledge and skills they need to offer sound advice to clients. All of our advisors are CeMAP qualified and they also have the added benefit of being part of a trusted team of local mortgage advisors with over 30 years of experience!
Do They Have an Insurance Team to Help Protect Your Mortgage?
Having the right insurance is essential if you want peace of mind that your home and financial future are protected. This has arguably become even more important with the rising cost of living and economic uncertainty. Michael Usher Mortgage Services offers a FREE Insurance Service to help you find and arrange the right mortgage protection for your needs. Our specialist insurance advisors will work with you to understand your situation and organise a suitable policy for you and your family completely fee-free.
The Bottom Line
Being self-employed shouldn’t deter you from getting a mortgage but it can make the application slightly more complex. It’s also crucial that you get a deal that’s right for your situation and that you approach a lender that’s likely to accept your application to protect your credit score. The first thing to do is speak to a mortgage broker who is experienced with self-employed applicants. In the article above, we explained six things to look for when choosing a self-employed mortgage broker, but to save you time, we can confidently say that our specialist self-employed mortgage advisors meet all of these points! What’s more, our team is one of the most experienced in the South of England, having been helping self-employed people with their mortgages for over 30 years!
We offer a comprehensive range of products from across the market, including specialist deals that aren’t available directly from lenders. We’ll aim to find you a self-employed mortgage that suits your needs, guide you through the process, and liaise with your lender, estate agent and solicitor to ensure your application goes smoothly. We can also help to protect your mortgage with our FREE Insurance Service.
Talk to one of our friendly mortgage advisors for free to get going quickly. Our head office is on Frimley High Street, but we can also help you remotely via phone or video call if you’d prefer. We look forward to chatting with you!
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Your home may be repossessed if you do not keep up repayments on your mortgage. There may be a fee for mortgage advice. The precise amount will
depend on your circumstances but will be agreed with you before
proceeding.
There are additional stamp duty costs involved with property development. It is advisable to speak with an accountant and/or tax advisor to clarify your tax position before proceeding.
