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Self-Employed Mortgages

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 not be a difficult or stressful process.

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 mortgage advice for self employed individuals. If you’re here, chances are you’ve encountered obstacles securing a mortgage, perhaps facing rejections from lenders who’ve approved your employed peers. Unfortunately, this scenario is all too common for self-employed professionals navigating the mortgage landscape.

That’s why we’re here. Active Mortgages is committed to supporting entrepreneurs like you – individuals who embody bravery, initiative, and determination in pursuing their business ventures. We firmly believe that the process of applying for a self employed mortgage shouldn’t be daunting or overwhelming.

Our team at Active Mortgages specialises in assisting self-employed clients, offering expert guidance to simplify the process. We handle interactions with mortgage lenders on your behalf, ensuring a seamless experience. Backed by years of experience and a track record of success, we’re equipped to deliver optimal results for your mortgage needs. Schedule a consultation with Active Mortgages today to explore how we can help you secure your first or next property.

Navigating self-employed mortgages

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

Securing a mortgage as a self-employed individual presents unique challenges compared to traditional employment. While employed applicants typically provide proof of income from employers, self-employed individuals often lack consistent earnings, making it difficult to demonstrate financial stability to lenders. Consequently, many mainstream lenders hesitate to approve self-employed applicants.

But fear not – Active Mortgages is here to assist! We collaborate with a diverse network of mortgage providers, facilitating your property purchase journey. By maintaining close relationships with lenders, we’re able to identify the best mortgage options available to you, streamlining the approval process and expediting your path to homeownership.

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? In the wake of the 2008/2009 financial crisis, lenders no longer accept self-certification for mortgage approval. As a self-employed applicant, you’re required to substantiate your earnings, providing lenders with the assurance that you can repay the loan.

Typically, lenders request a minimum of three years’ worth of accounts for evaluation.

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

From certified earning reports to HMRC tax documents, we’ll ensure you’re well-prepared to present a compelling case to 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.

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. Remember you are proving to a lender that your business is secure, and they can be confident in your ability to pay back the mortgage. 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: ensuring you are paying off as much credit card debt as possible; 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.

Booking a consultation is quick and easy – simply click the button below, and we’ll be in touch shortly to guide you through 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

What our customers say

Daniel Couchman
Daniel Couchman
12 January 2024
This review is long overdue - Active mortgages got us our dream home! I spoke with around 7 different brokers from different companies which didn’t know what they were talking about but then I found Simon at active - he was straight to the point and got us the best deal and the highest amount possible. I got a bit impatient at one point but that was due to the banks taking ages to process everything - active were calm and reassured us. Highly recommended. Excellent from start to finish Even sent us a gift for Xmas - thank you!
Meena Kanagavel
Meena Kanagavel
2 January 2024
Jamie Murray from Active Mortgages has been amazing in setting up the VAT loan, whilst we purchased our Land. Right from the start, Jamie has been proactive in finding the correct (BEST) deals for us and ensured everyone is aligned to complete on time. Highly recommend using Active Mortgages, and we would certainly be using them again for future projects.Thanks once again Jamie for all your support throughout Dec, appreciate your efforts in making sure our purchase was done on time. Many thanks Meena (and Mark Jones)
Stefan Stancila
Stefan Stancila
21 December 2023
Comprehensive advice from Jamie & easy communication through remortgage process . Recommend!
Yasmin Bates
Yasmin Bates
20 December 2023
Jamie has made the whole process of buying a house very straightforward, especially for self employed. Would 100% recommend and would use again too!
Gerard
Gerard
19 December 2023
Good experience, helped us every step of the way.
darren john coggins
darren john coggins
12 December 2023
Dan has been great from start to finish. As a first time buyer it can be quite overwhelming and confusing but Dan has went above and beyond. His process was very easy, efficient and we could not recommend him enough!
FUNMI AKINLAMI
FUNMI AKINLAMI
7 December 2023
Excellent service, hard working staff
akinlami akinwale
akinlami akinwale
7 December 2023
Excellent service, very patient and willing to help staff
Michael Bennett
Michael Bennett
5 December 2023
Dan has been great from the first phone call. He has made everything simple and taken the time to explain everything to me as a first time buyer, answering any questions I have along the way, highly recommend
james whitaker
james whitaker
31 October 2023
Great professional service highly recommended for anything financial
Active Mortgages - The UK's Leading Mortgage & Finance Specialists

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