Can I get a mortgage if I’m self-employed is a question that I get asked all the time.
I believe that anybody can get a mortgage providing you have a little bit of planning and a little bit of preparation, so it doesn’t matter if you’re employed, it doesn’t matter if you’re self-employed, sole trader, entrepreneur, business owner, contractor, whoever you are, it could be possible for you to get a mortgage.
If you want to find how you could get a mortgage and achieve self-employed mortgage success, then please watch the video below or read the blog article.
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Can I get a mortgage if I’m self-employed is a question that I get asked all the time.
I believe that most people can get a mortgage providing you have a little bit of planning and a little bit of preparation, so it doesn’t matter if you’re employed, it doesn’t matter if you’re self-employed, sole trader, entrepreneur, business owner, contractor, whoever you are, it could be possible for you to get a mortgage. The key things that you’re going to need to have in place to set yourself up for that mortgage success is to have a deposit. You’re going to need at least a 5% deposit. My personal recommendation is to have at least a 10% deposit because it makes more lenders available to you.
My ethos and belief is that you want to fit the majority of lenders. The more niche you make your circumstances, the higher you’re going to find the fees maybe, the higher you could find the interest rate, and potentially the harder you could find it to get your mortgage. You’re going to want to make sure that you have the right level of income because mortgages are based on affordability. Being able to prove that income is so important for you. If you’re employed, it’s payslips. We need at least three months. We might need two years of pay 60s.
If you’re self-employed or if you’re a business owner, it’s going to be things like your SA302s, which you can get from the Inland Revenue, or it’s going to be company accounts confirming your salary and your dividends. The other thing that I often see is a number of people who use their overdraft. There are many people just like you who are business owners, entrepreneurs, self-employed people, even employed people using that overdraft when they want to apply for a mortgage. You’re trying to prove to a mortgage lender that your mortgage is going to be affordable, and that you can afford your current standard of living, and yet you’re using your overdraft. If you’re thinking about a mortgage, you should consider getting that overdraft paid off long before you start thinking about buying your home.
Another thing to consider is your credit report. Ideally, you want to make sure you’ve had no defaults, no CCJs, no missed payments in at least two years. It could be possible for you to get a mortgage inside that two years, but you’re just making your circumstances more unique again, and more niche, which we said already may push your interest rate up.
Another thing I always find is documentation being one of the major pitfalls for people, and it probably adds that most amount of stress to my clients. Things like bank statements, the proof of income, your deposit being another example. Deposit, where’s your deposit coming from? Is it from your savings? And have you got it in your bank account now or are you getting it from a friend, a relative? Is it being gifted? Making sure that you’re honest about the source of your deposit from day one.
The number of people that I speak to, and then when we get to the point of application three months later, for example, when they found their home, and the whole source of the deposit changes. Making sure you’re solid on that information makes your life less stressful, makes our lives easier and makes it easier for the mortgage lender to understand. I believe that thinking about the finance first is your first key step to making your life easy when it comes to buying your dream home, remortgaging, even investing in property.
If you want to know more about how you can prepare for your mortgage, then check out the other videos that I’ve done on YouTube. Come and tell me what you think of this one over on Facebook, or potentially visit our website, active.mortgage, and download The 7 Mistakes That Business Owners and Entrepreneurs Make When Looking to Buy Their Dream Home or Invest in Property. Thank you very much and I look forward to seeing you on the next one.
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If you liked this blog we think you will love this one we did on How Many Years Accounts Do I Need For A Self-Employed Mortgage?
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