Updated on 28 November 2022

Getting a mortgage when you work for yourself can seem tricky, but it’s certainly not impossible. Here’s our top tips if you’re self-employed and want to get a mortgage…

Admittedly, it can be more challenging to get a mortgage if you’re self-employed. You’ll need to provide detailed evidence of your income before a lender will approve your mortgage application.

Tip 1: Be ready to prove your income

The way a lender calculates the amount you can borrow depends on the nature of your business. If you’re registered as a sole trader or partner, lenders will take your net profit into account. If you’re a limited company, they will look at your salary and dividends.

Make sure you have your paperwork ready. The documents you will need to provide vary depending on the type of self-employment you have. The length of time you’ve been self-employed is also key – lenders will generally want to see at least two years’ worth of accounts. Typically, if you’re self-employed, you’ll be asked to provide the following:

• Proof of ID, passport or driving licence, proof of address, bank statements for the last three months

• If you’re a sole trader or a partnership: The most recent two years’ worth of HMRC Tax Calculation and the most recent two years’ worth of Tax year Overviews

• If you’re a limited company director: Two years completed company audited accounts signed off by your accountant, most recent two years’ tax year overviews, most recent two years’ tax year calculations

Tip 2: Keep track of your work

Proving you have a steady stream of work, or having evidence of future jobs lined up, is also beneficial, so ensure your workload is well documented. If you’re a contract worker, having copies of recent and future contracts will also help.

Tip 3: Get your finances in good shape

You will greatly improve your chances of getting a mortgage application approved if you have a good credit rating. You can check your credit report by using Checkmyfile. Make sure your loans are all paid on time, and don’t take out any new loans or make any large purchases just before you apply for a mortgage.

Tip 4: Be honest with yourself about the timing

Being self-employed can be rewarding in many ways but can also be unpredictable. If you anticipate any major changes in your income, such as having fewer clients due to cutbacks, be honest with yourself about whether now is the right time to apply for a mortgage. No one wants the stress of not being able to meet the monthly payments. If things are a bit unpredictable right now, it may be worth holding off for another six months to a year, if you can, to ensure that things are stable.

Tip 5: Speak to an experienced mortgage broker

Many of our clients are self-employed, so we’re perfectly placed to understand the challenges you may face and will also know which lenders are more likely to be receptive to self-employed borrowers.

Contact us today for mortgage advice. In addition, you can also download our free guide to self-employed mortgages or read our article, Getting A Mortgage When You’re Self Employed is Possible.

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