To be deemed self employed, it means you will own 25% or more of a business. Typically, to secure a self employed mortgage you will need to provide your lender with at least two years’ worth of company accounts and tax returns. Being able to prove that you have an income plentiful enough to make the necessary repayments is crucial. If you're a contractor, you may have to evidence future work, to show that your level of income will be sustained. Each lender and their criteria will differ, but a solid track record of regular contract work may be to your advantage.
Asides from providing sturdy, accurate and reliable evidence of accounts and future work loads, there are a few other things you could do to strengthen your application. Aspects such as your deposit, like in any mortgage, will play a big factor (as always, the bigger, the better). You could also perform a credit check on yourself to ensure everything is legitimate, beforehand. The amount you can borrow depends on each lender and the way they choose to calculate it. If you’re a limited company, lenders tend to look at your salary and dividends. Whereas, if you’re a sole trader, the net profit will be taken into account. Another way of improving your chances are to shop around and seek advice from a mortgage broker before you take action.
Some lenders do specialise in self employed mortgages alone but the majority work under the impression that being self employed should not limit the mortgage options available to you. Most lenders will gain you access to a range of mortgage deals which include fixed, variable and tracker mortgages. The good news is that the market is improving and more and more self employed people are being approved mortgages.
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