How to Get a Mortgage if You’re Self-Employed
Buying a house can be stressful at the best of times – particularly getting that all-important mortgage offer. But if you’re among the five million people in the UK who work for themselves, the stakes can be even higher.
According a survey by mortgage broker Haysto, almost a third (31%) of people who are self-employed reported feeling depressed by the struggle to find a loan, with 29% saying they were treated unfairly.
Paul Coss, co-founder of Haysto said: “Getting a mortgage when you’re self-employed can be difficult, as mortgage lenders tend to prefer people in full-time employment because it’s easy and simple to understand their income.
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“Despite self-employed people usually earning more money than if they were on a salary, mortgage lenders just aren’t set up to deal with complex incomes.”
If you’re self-employed – and increasing numbers of us are – and are looking to buy, there are things you can do to increase your chances and minimise stress levels.
Lenders will consider you self-employed if it is your main income or you own more than 25% of a business. They will want to know that you can afford the mortgage, so will need to see evidence of this income. This could include certified accounts or HMRC records or proof of dividend payments, if you’re a company director. You will also need to provide the normal proofs of identity such as a passport, driving licence, utility and council tax bills.
In most cases, lenders will want to see evidence of three years’ trading, but some may consider you if you have been freelancing for a shorter period. You can increase your chances of getting an offer by providing details of up-coming contracts and offering to put down a bigger deposit – 10% is usually the minimum for the self-employed. Having a good credit history and no outstanding debts could help you too.
Read more about this story on the Property Reporter website.