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Self-employed Mortgage Advice
At IMC Mortgage Brokers, we focus on helping self-employed individuals find mortgages. We have expertise in understanding how various lenders, including banks, building societies, and specialised lending companies, evaluate these applicants.
We can help you find the right self-employed mortgage that suits your needs and situation.
No matter your income, if you're self employed, contracting or a sole trader or partnership - we can help you.
Being self-employed means working for yourself and not being a salaried employee. Lenders assess how a self-employed person can pay for a mortgage, and the structure of your business can affect their decision.
Traditional lenders may not be sympathetic to self-employed borrowers with irregular income. However, our experts can help find the right mortgage for you if you can demonstrate your income through your accounts.
A “self-employed mortgage” is not a specific type of mortgage, but rather refers to the type of people applying. In theory, anyone with a good credit record should have equal access to mortgage rates. The difference lies in how lenders assess income and ability to afford the mortgage.
Lenders check payslips and salaries for regular employees. For the self-employed, they consider net profits, projected profits, dividends, contracts and business conduct.
Lenders have become stricter in approving mortgages. This difficulty in approval has arisen for individuals with irregular incomes or bad credit. Most lenders base their calculations on historical data rather than current income.
However, there are some lenders who are more willing to consider self-employed individuals.
IMC Mortgage Brokers specialise in helping self-employed individuals find a mortgage by working with different lenders.
Lenders initially created self-certified mortgages for the self-employed with complicated incomes but later expanded them to employed individuals. However, the risk of defaulting outweighed the benefits, leading to the withdrawal of these mortgages in the UK.
An SA302 form is a document provided by HMRC that shows your income and tax calculations for a specific tax year. Over 50 lenders accept SA302s printed at home or by an accountant, along with the corresponding tax year overview. However, some lenders may require original SA302s directly from HMRC.
The form summarises your income from various sources and breaks down the tax due. You can obtain the form online or through commercial software if you file your taxes online. If you need an original form, you must request it from HMRC.
To get an original SA302, call the Self-Assessment helpline at 0300 200 3310 and give your National Insurance number and Unique Taxpayer Reference (UTR). You can also write to:
Self Assessment,
HM Revenue and Customs,
BX9 1AS
Once HMRC has received your request, you should allow up to two weeks for the requested documentation to arrive.
Lenders have different ways of calculating income for self-employed mortgage applicants, there are no specific rules. However, after determining income, lenders base borrowing decisions on the same criteria as other mortgage applicants.
Mortgage lenders offer the same rates to employed and self-employed individuals. Mortgage advisers analyse various factors to determine the best mortgage deal for each person’s situation.
Just because your bank rejects your mortgage application doesn’t mean you’re completely ineligible for a mortgage. Speaking with a mortgage broker can assist you in locating the appropriate lender. This can save you time and enhance your likelihood of approval. It is important to note that each lender has different criteria.
If you’re self-employed, applying for a mortgage comes with some criteria to think about. This self-employed mortgage criteria includes things like, proof of income, tax documentation, credit history and more.
Lenders always require proof of income for mortgage applications. Some lenders verify income with HMRC to save time, but it doesn’t eliminate the need to prove your income. Mortgage brokers still need to verify and document income before submitting applications.
Some lenders do not count retained profits as income, which can make it hard for business owners to get a mortgage. However, there are specialist lenders who will take retained profits into account when calculating affordability.
Talk to experts or fill out a form to find the right solution for your needs.
Some lenders accept dividends as income, but others look at the net profit of a company. You can combine salary and dividends for mortgage calculations. However, problems may occur if the total is higher than the net profit. Speak with our team to ensure accurate figures for a suitable lender.
Lenders have different approaches to considering self-employed income in mortgage affordability calculations. Previously, lenders typically required 3 years of trading accounts. However, some lenders now consider the current profit level and its sustainability.
Some lenders may now consider an application if you have 2 years of trading accounts and the associated tax calculations. Typically, lenders will use an average of the 2 years’ net profit for mortgage calculation purposes. Where there is a greater deposit or equity value, lenders are likely to be more accepting.
Our specialist advisers will be able to review your circumstances and requirements to recommend the best way forward.
Trying to get a mortgage with bad credit can be a difficult task. Our advisers are experts in helping self-employed applicants with bad credit obtain a mortgage in this specific market. We have access to unique offerings and qualifications that are not readily available to other mortgage brokers
Lenders treat mortgage applications from self-employed individuals the same as those from salaried individuals. Lenders focus on the applicant’s ability to repay the loan based on their provable income. Lenders may consider self-employed people riskier borrowers due to the uncertainty of their income. Lenders may charge higher interest rates due to this.
To increase your likelihood of obtaining a mortgage with a favourable interest rate, there are several steps you can take.
- First, provide evidence of a robust business plan.
- Second, save a larger amount of money for a down payment.
- Lastly, maintain a solid credit history.
By doing so, you can demonstrate your reliability as a borrower and lower the lender’s risk. Taking these steps will help you secure a favourable mortgage rate.
There are various lenders in the UK who provide mortgages for both employed and self-employed individuals. However, self-employed mortgage applications require more detailed financial information such as verified accounts, tax calculations, and business projections. Lenders have different criteria for approval. Seek advice from a mortgage adviser to find the right mortgage for you.
Self-employed individuals can qualify for the same mortgage offers as those with a fixed salary. However, you must provide all the necessary financial details and demonstrate that your income is reliable.
To get good deals, organise finances well, have a good credit history, and give a decent deposit. To find the best mortgage for you, talk to a mortgage advisor like our team at IMC Mortgage Brokers. We can help you choose the most suitable and affordable option based on your situation and requirements.
To find the best mortgage for you, talk to a mortgage advisor like our team at IMC Mortgage Brokers. We can help you choose the most suitable and affordable option based on your situation and requirements. We’ll take a close look at your circumstances and your aims and recommend the best course of action going forward.
Mortgage brokers can access deals that differ from those advertised on the high street or online. However, not all brokers have the same access to lenders and products. Some tie them to specific providers, limiting their options.
IMC Mortgage Brokers can find the best mortgage for each person by using many lenders and products. We can also secure exclusive deals through our strong relationships with lenders.
Feel free to contact us to discuss further how we can obtain the most favourable deal on your home loan.
As mortgage brokers for the self-employed, IMC Mortgage Brokers specialise in helping individuals with irregular or complex income streams obtain mortgages.
We offer impartial advice and have access to a wide range of lenders. We also consider different trading strategies and can work with clients who only have one year’s trading accounts.
Please feel free to get in touch with our team here at IMC Mortgage Brokers for a free initial, no-obligation consultation. We’ll be happy to see how we can help, let us do the hard work for you and find the mortgage to meet your needs.
Applying for a mortgage can be challenging for self-employed individuals, but mortgage brokers can help find suitable options. Lenders consider income, assets, affordability, and deposit amount. Working with a mortgage advisor or broker can help access specialist lenders with more flexible criteria.
We recommend contacting us to help you explore the best options.
