Self Employed Mortgages Made Simple

Straightforward mortgage advice from expert brokers. Finding the perfect mortgage just for you without the jargon. 

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Straightforward mortgage advice from expert brokers. Finding the perfect mortgage just for you without the jargon. 

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Self Employed Mortgages Made Simple, Vantage Mortgages

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Self Employed Mortgages Made Simple 

Mortgages for the self employed are just the same as for anyone else, just with a few differences to how lenders look at your income. There is a popular misconception that it is hard to get a mortgage if you are self employed but in reality this is not true! There are millions of self employed people in the UK and many of those people are homeowners with mortgages. All you need is the right advice from a broker who is an expert when it comes to how you get paid.

This page is specifically for sole-traders and partnerships. If you are a contractor or Ltd company director we have special pages just for you.

What is a self employed mortgage?

Well, technically there is no such thing as a “self employed mortgage” as most lenders will simply allow anyone to access their mortgage products. There are though, some lenders that are much better than others when it comes to helping self employed people obtain mortgages.

How much Can I borrow on a mortgage if I am self employed?

The amount you can borrow will depend on your income, just like for an employed person. The difference is how the lender looks at your income and what proof they need. Generally speaking though you can borrow the same as an employed person on the same income

What documents do you need for a mortgage when self employed?

This is the big difference. Where an employed person might get pay slips, when you are self employed you will not usually and the lender wants to know more about your income history rather than what you are taking out right now. Most lenders will ask us for your last 2 years SA302’s (or tax calculations) and your last 2 years Tax Overviews. Both of these documents can be downloaded from the Government Gateway or your accountant can usually just get them for you!

How do I get my documents?

Once you can actually remember your log in details for the government Gateway, it is fairly straight forward:

  1. Log in to your HMRC online account.
  2. Go to ‘Self Assessment’
  3. Go to ‘More Self Assessment Details’
  4. Choose ‘Get your SA302 tax calculation’
  5. Select the option to print your tax calculation and tax overview. 

Speak To an Expert
Our highly knowledgable advisers are ready to help and answer any questions you may have around your first time buyers mortgage.

What figures do you use for a mortgage when self employed? 

The most important figure for a mortgage lender is what you actually make in profit. So we always use your “net profit” figure from your tax calculation. This is the figure that is left once you have had all of your income, then taken away all of your costs. This is also the figure that you will pay your income tax on. It can be tempting often to try and make this figure as low as possible for tax reasons but remember, the lower this figure is the less you will be able to borrow!

Can I get a mortgage with just one year self employed?

Yes you can! (potentially) so this isn’t an exact science but it is entirely achievable most of the time. There are a select few lenders that will lend to you based on just one year of trading but it will depend on your whole situation. If your deposit is good it will help as well. Lenders will often look at your history with just one year self employed. So if you were employed as an electrician for example and then you went self employed as an electrician and you have one year of trading and you earned a similar amount to what you earned before then the chances are you will be absolutely fine. If though you were employed as a librarian lets say, then you decided to be a self employed plumber then you might struggle with no track record in that industry!

How much deposit do you need if you are self employed?

There is no difference here technically, most lenders do not have a different minimum deposit if you are self employed but some lenders are a little more cautious if you are so in some situations you may find yourself struggling with a smaller deposit if you do not know which lenders to go to.

Do I have to do this year’s accounts?

Most High Street lenders will only use self employed figures that are less than 18 months old. So as we are going to be using your end of tax year figures this means that 4th October the following year is the last chance to use them. So as we approach October you need to be thinking about doing your more recent figures. This is different to what you have to do for HMRC, you normally don’t have to worry about it until January so this is a bit early. Don’t worry you don’t have to pay the tax any sooner but if you are applying for a mortgage in November, you will need to have done that year’s figures! There are always exceptions to this but to give yourself the best choice, don’t leave it.

The key to getting the best mortgage when you are self employed:

Above all else, get prepared! Do your research early, speak to an adviser that knows how to look at your income and make sure your accountant has everything up to date for you. Get your latest years figures done and get the income proof documents downloaded ready o go! Then the mortgage application will be a breeze!

For more information on Self Employed Mortgages, please Contact Us

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