As a self employed person, applying for a mortgage can seem like a minefield. The same mortgages that are available to PAYE applicants will be available to those who are self employed, but it can be difficult to obtain a mortgage, as most lenders require 2 years worth of accounts and they can be very strict with the way that they assess those accounts. Our Leeds based mortgage brokers deal with self employed people every day, so we know exactly which lenders would accept an application and we have an in depth understanding of how they will assess your accounts.
If you are a sole trader, lenders will generally base their affordability assessment on an average of your last 2 years worth of net profits, however if your most recent years’ profits have declined, they may just use the lower figure. If you only have 1 years’ worth of accounts, there are few options available, but our mortgage brokers in Leeds will be able to point you in the right direction and help you find a suitable mortgage.
As a limited company the affordability is based on your salary and dividends. In some cases lenders can consider using the profits before taxation. If you have more than a 20% share in your own limited company, most lenders will class you as self employed.
In preparation for your mortgage application, you should ask your accountant for the last 3 years SA302s and tax year overviews (you don’t always need 3 and if you have only been trading for 2 there will still be plenty of options available to you). If you operate as a LTD company then your last 3 years’ (or 2) full company accounts will be required, along with your last 3-6 months business bank statements.
In some rare situations, certain lenders ask that self employed people front a higher deposit for their mortgage. Generally speaking though, a self employed person will have a large number of options available to them and the minimum deposit can be as low as 5%.
A self employed person will generally pay the same rate as someone who is employed. In rare circumstances a lender may have a specific self employed product, but these are generally the more specialist lenders who can lend where the high street cannot.
Enquire today – there is no obligation to go ahead and your credit score will not be impacted.
In some circumstances you may be able to obtain a mortgage if you fall into the ‘CIS Worker’ category. Get in touch with a mortgage broker in Wakefield to find out more.
Yes, although there are fewer lenders that would be happy with this scenario there are options available.
Yes – some lenders will use retained profit for their income calculations.
Yes – there are many lenders that specialise both in adverse credit and self employed people.
There may be if you have family members or friends willing to help you as part of a ‘joint borrower, sole proprietor’ mortgage. Speak to a mortgage adviser in Wakefield today.
Most lenders will be fine with this scenario, however some may deduct the grant from your overall earnings. Speak to an expert in Wakefield today to find out more.
Yes – depending on how you are performing now, there may be lenders that are willing to help.
