Buying a home as a self-employed person is often thought to be an impossible challenge. Many business owners and self-employed workers assume that because they work for themselves, they’ll be unable to get a mortgage. However, although self-employment may cause a few hurdles during the mortgage application process, it certainly doesn’t spell the end for your homeownership dreams.
Read on to find out how to get a mortgage if you’re self-employed.
Use a mortgage broker
First thing’s first, it may be worth getting in touch with a mortgage broker for help with your application. An experienced and qualified broker will assess your financial circumstances before pointing you in the direction of the lenders most likely to approve your application. Your broker will already know which mortgage providers are flexible enough to consider applications from the self-employed and they’ll also know which ones are fussy and best avoided.
Cleaning up your credit rating
Have you checked your credit rating recently? If not, it’s worth finding out your score and making moves to improve it if necessary.
Lenders will almost certainly take your credit-worthiness into account before approving your application, so it’s wise to your get your finances in order and ensure you can provide proof that you’re a responsible and reliable borrower.
To improve your credit rating:
- Avoid applying for other lines of credit for 3-6 months before submitting a mortgage application
- Ensure all bills are paid on time
- Close credit accounts you don’t use
- Register to vote if you haven’t already
- Contact credit reference agencies if you find any mistakes in your credit report
Proving your worth
In order to get a mortgage agreement as a self-employed person, you’ll need to prove to potential lenders that your finances are strong enough to repay such a large loan.
Not only will you need to provide proof of your deposit, you may be expected to provide the following:
- At least two years’ accounts
- HMRC tax calculations
- HMRC tax year overviews
- Your accountant’s contact details
If you’d like help getting a mortgage as a self-employed person, please get in touch with the team at TaylorMade.
