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Advice on Self-Employed Mortgages with experienced advisors

Self employed mortgage should not be a difficult or stressful process. We formed Active Mortgages to help people just like you. People who have the bravery, initiative, and gumption to start up their own businesses. We believe applying for a self employed mortgage should be easy

The Self-Employed Mortgage Guide

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We formed Active Mortgages to help people just like you - mortgage advice for the self employed.

At Active Mortgages, we’re dedicated to providing tailored self employed mortgage advice. If you have found yourself here, chances are you’ve encountered set backs when applying for a mortgage.

Perhaps you have faced rejections from lenders who’ve approved your peers who are not self employed. Unfortunately, this is all too common for self-employed professionals and something we deal with often. Our team of experienced self employed mortgage advisors have all the tools to help make your application a success.

Active Mortgages is committed to supporting entrepreneurs like you. Those individuals who embody bravery, initiative, and determination. We think applying for a self employed mortgage shouldn’t be scary. We can help make the process easier and less stressful.

Our team specialises in assisting self-employed clients to achieve their goals. We offer expert guidance to make the process simple. We handle all communication with mortgage lenders on your behalf, ensuring it stays as stress-free as possible.

With our experience and success rate, we can provide the best results for you. Start today and schedule a meeting with Active Mortgages. We will see how we can assist in buying your first or next home.

Navigating self-employed mortgages

Active Mortgages - The UK's Leading Self-Employed Mortgage Specialist.

Securing a mortgage when self-employed presents its own set of challenges compared to traditional employment. Applicants with jobs have income from employers.

Self-employed individuals may not have consistent earnings. This can make it difficult for them to demonstrate financial stability to lenders. As a result, many mainstream lenders hesitate to approve self-employed applicants.

But fear not – our team of experienced self employed mortgage advisors is here to help. We collaborate with a diverse network of mortgage providers, helping your property purchase journey. By maintaining close relationships with lenders, we’re able to identify the best mortgage options available to you.

This allows our self employed mortgage advice to aid in streamlining the approval process. Though this is not guaranteed this can help in speeding up your path to homeownership.

Let us guide you through

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Empowering self-employed borrowers

What is needed for a self-employed individual to secure a mortgage?

What does it take to secure a mortgage when you’re self-employed? Following on from the 2008/2009 financial crisis, lenders no longer accept self-certification for mortgage approval.

As a self-employed applicant, you’re required to prove your earnings to the lender. But what does this involve? This means that you will need to provide lenders with the assurance that you can repay the loan.

This could be just one year of financial information. Lenders can use this to understand your current financial situation.

Lenders usually ask for at least three years of financial records. However, some unemployed people may not have this information available.

While this may pose a challenge for some businesses, Active offers guidance and support to navigate this requirement seamlessly.

We will help you gather all the necessary financial documents, like earning reports and tax forms, to impress lenders.

Use our self-employed mortgage calculator today to see how much you could borrow and what mortgage rate you might be able to get.

Make applying for a self employed mortgage easy with Active Mortgages.

Our top tips for mortgage success

Preparing to apply for a self employed mortgage? Follow these steps for a smoother experience:

Step 1

Prepare your certified earning reports for as far back as possible, at least two years but some lenders may ask for 5 years. So it’s best to have as many as you can. You need to show that your business is profitable.

Step 2

HMRC tax reports – for at least the last two years

Step 3

Contracts – you need to prove that your earnings will continue. Show the lender your business is secure and you can pay back the mortgage. They need to trust you. This could potentially be more important if your business has had a slower year recently.

Step 4

Use a chartered accountant to sign off your accounts; a mortgage lender will look more favourably if you do.

Step 5

Check on your credit score and look at improving it before the application. This can be done in a number of ways. One way is by ensuring you are paying off as much credit card debt as possible. You can also make sure you are on the electoral roll; and paying your bills on time.

Active Mortgages: your trusted mortgage partner

When it comes to self-employed mortgages, Active Mortgages is your trusted ally. We understand the complexities of the process and are committed to simplifying it for you. Let us help turn your homeownership aspirations into reality. Contact us today to kickstart your journey towards owning the home of your dreams.

To book a consultation, just click the button below, and we will contact you soon to help you with the process.

FAQs

As a self-employed business owner applying for a mortgage, you will need to prove your earnings. However, if you have only just started trading and only have one year of accounts, you are going to need to prove that your business is viable, and your income is going to be stable enough to afford to pay the mortgage back. Providing contracts for future work, a detailed business plan and a projection report from a chartered accountant are types of typically requested evidence.

Many high street banks will not provide a self employed mortgages for applicants with only one year of accounts, however, there are specialist lenders available who are willing to work with you and your circumstances. Finding those lenders and securing a decent mortgage deal is no easy mission; you should seek the assistance of one of Active Mortgages’ mortgage specialists who have helped copious numbers of clients in similar situations over the years.

Absolutely! There are actually some high street banks who will provide self employed mortgages to applicants with only two years of accounts, however, there are also specialist lenders available who have fewer restrictions than high street lenders who specialise in self-employed applicants. These are the lenders we work with closely and who often offer better deals to self-employed clients. We have excellent relationships with mortgage lenders that are happy to supply a loan to you based on your most recent income rather than taking an average of your earnings.

Self-employed individuals often face difficulties in proving their income stability to lenders due to fluctuating earnings and lack of traditional payslips. This uncertainty makes lenders hesitant to approve mortgage applications, leading to more stringent requirements for self-employed borrowers.

It is commonplace for directors of limited companies to pay themselves a salary that is below the next tax threshold, retain more profit in their businesses and pay themselves a large dividend. Tax on dividends is lower than on income, so it makes sense for directors to do so, to maximise their income levels.

However, many high street banks will only consider the applicant’s personal salary income, which can be significantly lower than their real take-home amount. This, therefore, limits the amount the bank is willing to lend you for a mortgage, despite being the director of a (hopefully) profitable business.

There are options though so do not worry. It is just advisable for you to find a lender who specialises in self employed mortgages for company directors looking to make their property purchase. These specialist lenders will consider your circumstances and your dividend payments as well as all other criteria that self-employed directors need to meet. That is where Active Mortgages come in, because we work with these types of lenders every day. We have a dedicated specialised team that liaise with the types of lenders who see the bigger picture and take into account your dividend and bonus payments rather than just your monthly salaried income. You are in safe hands with Active Mortgages, we can do the hard work for you so you can focus on running that business.

To improve your chances of mortgage approval, it’s essential to prepare thorough documentation of your income and financial stability. This includes maintaining up-to-date earning reports, ensuring compliance with HMRC tax requirements, and demonstrating future earnings potential through contracts. Additionally, managing and improving your credit score can enhance your overall financial profile to lenders.

Ultimately, it is not too dissimilar to what is required from an individual looking to apply for a standard mortgage, it just requires more of it. The best way to prepare for a self employed mortgage application, as an Active Mortgage adviser will go through with you, is to prepare as much as you can before the phone call with our mortgage adviser. Make sure you have records from your current accounts, saving accounts, credit cards etc as normal but then you need to have any other financial records of income that you might be receiving, e.g. pension schemes, dividends, trusts etc. You should also have a record of your assets as well. You are proving your wealth to the adviser who in turn will do so to a bank so the more prepared you are, the more likely that you are going to be approved for a mortgage.

7 ways

to invest in your future with a mortgage tailored to your goals

Trust our team to find the perfect mortgage for your budget and lifestyle.

Active Mortgages - The UK's Leading Mortgage & Finance Specialists

Trust our team to find the perfect mortgage for your budget and lifestyle.

Active Mortgages - The UK's Leading Mortgage & Finance Specialists
Active Mortgages - The UK's Leading Mortgage & Finance Specialists

Make your dream property a reality

Make your dream home a reality

Active Mortgages - The UK's Leading Mortgage & Finance Specialists

Book a call with one of our team to talk about your requirements.