Self employed people will be able to apply for the same mortgages as everyone else, but it can be trickier than if you were employed in certain circumstances. Most lenders will want to see some kind of track record and when it comes to your income, this will mean being able to show your tax returns for a period of time.
As a sole trader, the affordability assessment will be based on your net profits – usually an average of the last 2 years, or the latest year if your profits are declining.
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.
To prepare for your mortgage application you should prepare your SA302 tax return documents and your accompanying tax year overviews. You should also have your full accounts for the last 2 years ready, along with your last 3 months business bank statements.
In some cases, mortgage lenders require that you use a slightly higher deposit than normal, however there are plenty of lenders that will still lend to self employed people who only have a 5% deposit available.
There isn’t such a thing as a self employed mortgage product, so you will pay the same interest rate as someone who is in regular employment, however you may not be eligible to apply with certain lenders depending on their criteria and your circumstances.
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.
