The first three things to know
Getting a mortgage when you work for yourself isn’t quite as straight-forward as those who don’t. Here are the first three things to bear in mind.
Nothing’s blocked You can get access to the same lenders and mortgages as everyone else.
Prove your income You need to prove you earn a steady income and can pay your mortgage.
Get advice An adviser can help prepare your application and answer your questions.
An adviser could make the difference
Being prepared and having your paperwork in a good place to prove you can make the repayments is the name of the game here. One of our advisers can help explain everything to you, run you through your mortgage options and answer your questions in plain English. No matter how daft they sound in your head, there are no silly questions (we’ve been around for ages, we’ve heard everything!).
Things we’ll talk about during your appointment include:
What exactly is classed as self-employment.
How much you might need for a deposit.
What to do if your salary is irregular.
Something to bear in mind...
Schemes that can help
There are loads of schemes to help people get into their first homes sooner. Here are some that can really make the difference and are open to self-employed people.
Shared ownership
Buy a flexible share of a property and pay rent on the rest.
Five big questions
We help self-employed people looking to buy a home every day. These are the five questions we’re asked all the time.
Yes, you can. Lenders look at self-employed applicants on much the same terms as employed ones. They use accounts, tax returns and bank statements instead of a payslip to build the income picture.
Often, yes. A growing number of lenders will consider one year's accounts. This is especially true if your income is strong, your deposit is solid and you’re working in the same industry as you did before. It's worth speaking to an adviser who knows which lenders are most flexible here.
No, this is just a myth. Rates are based on your overall risk profile. This includes your deposit, credit file and affordability, rather than your employment status alone. A strong application can get the same rates as an employed applicant.
Some lenders will count retained profits (money left in your limited company rather than drawn as salary or dividends) as part of your income. This varies by lender, so it's worth getting advice on which ones take this approach.
For contractors, many lenders will look at your day rate and contract length rather than requiring years of accounts. This is especially true if you have a strong contract history in your field. A new contract can still count, particularly alongside a solid trading history.
Ready to see what's possible? Book a free appointment with a local Mab adviser, or try our mortgage affordability calculator to get a feel for your numbers first.