Mortgages for the Self-Employed
Wondering how to get a mortgage when self employed? Key Solutions can help.
We’re a ‘whole of market’ broker, so you can compare deals from nearly every lender on the market.
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Getting a mortgage when self employed? We’ve got your back.
We know that applying for a mortgage when self employed can be complicated and stressful. Running your own business comes with enough challenges, but being accepted for a mortgage doesn’t have to be one of them.
While the process may require a bit more documentation than for salaried employees, securing a mortgage when you’re self employed is definitely achievable. We leverage our established relationships with self employed mortgage lenders across the UK who understand the specific needs of self-employed borrowers.
How to get a mortgage when self employed.
Mortgages for self-employed people function very similarly to traditional mortgages, but with some key adaptations to address the verification of income. Just like salaried applicants, self-employed borrowers need to convince the lender they can consistently afford the mortgage repayments. The challenge lies in proving income stability when you don’t have regular paychecks and an employer to vouch for you.
What do self employed mortgage lenders look for?
Tax Returns: Typically, lenders request at least two years of tax returns (some may accept one year with strong financials) to assess your average income.
Business Financials: Profit and loss statements, balance sheets, and business bank statements can provide a clear picture of your business health and income generation.
Credit Score: Maintaining a good credit score demonstrates responsible financial management, a positive sign for lenders.
Debt-to-Income Ratio: A low debt-to-income ratio shows you have the capacity to manage your existing debts along with a mortgage payment.
Find out how much you can borrow as a self-employed person with our free mortgage calculator.
Our calculator is designed to make things easier for you, giving you a quick guide on how much you can borrow for any residential mortgage.
We take live information from nearly every mortgage lender in the market to give you an idea of your personal mortgage affordability, based on your income and outgoings.
All you need to do is fill in your information and your mortgage affordability will be displayed to you in a matter of minutes.
Self employed mortgages: Evidencing income and affordability.
In theory, self-employed people have access to mostly the same range of mortgage products as other borrowers. The difference is that it is more difficult to prove you have the income necessary to make the repayments on the loan for which you are applying on a consistent basis. This is why many lenders are unable to look favourably on those who are self employed.
At Key Solutions, however, we have a range of lenders that are willing to provide finance and, depending on your circumstances, we can source a mortgage for you.
Whilst specific lenders’ requirements will vary, generally, if you are self-employed you will need to have:
- A minimum of two years’ accounts (although some lenders will accept only one year’s). For those on zero-hours contracts, you will typically need to show evidence of income from payslips and P60 over a two to three-year period.
- A track record of regular work.
- A good credit history.
We’ve helped thousands gain access to the best mortgage lenders for self-employed people in the UK.
If you work for yourself either in a self-employed capacity or as an employed contractor your income levels can fluctuate throughout the year; this is what can make it more difficult to get a mortgage application approved.
A qualified mortgage broker, like Key Solutions, can be a valuable asset for self-employed borrowers. We can:
- Ensure you collect the necessary documents like tax returns, bank statements, and business financials in a way that effectively showcases your financial situation.
- Leverage our relationships with lenders who cater to self-employed borrowers and understand their specific requirements.
- Present your financial information in a way that emphasises your strengths as a borrower and increases your chances of approval.
Why choose Key Solutions for your self employed mortgage?
Your mortgage guaranteed
If we say you qualify for a mortgage, then we will stand by that decision and provide you with a 100% mortgage guarantee to you that you can get the funding you require. If we don’t, we will refund any associated cost you have incurred.
Your happiness guaranteed
Our advice to you is backed by our unique unconditional service guarantee which means if you are not happy with the service that we provide, just tell us why and we will immediately refund any fees that you have paid us.
Access to the mortgage market
As a trusted whole-of-market broker, we have access to nearly every mortgage product on the market as well as access to exclusive rates you won't get by going direct to a bank.
Quick and easy process
We will complete all research, administration and chasing on your behalf so you don’t have to worry about a thing! So leave it with us and your new mortgage offer will be with you quicker than you know it!
Let us make your life easier and better.
Our advice to you is also backed by our unique unconditional service and 100% mortgage guarantees which means you can proceed with us in absolute confidence that you will get a guaranteed mortgage and the very best service! Read more about Our Guarantees.
If you’re not sure whether you would be eligible for a mortgage because you are self-employed or have variable levels of income as a contractor, get in touch with the team at Key Solutions for some friendly advice. You can call us on 0800 138 5856 or get in touch below.
If you would like to quickly understand how much you could borrow you can also complete our mortgage calculator.
Mortgage Services
Finding you the best self employed mortgage deals in the UK
To find out more and to let us help you with your self employed mortgage needs please give us a call us on 0800 138 5856 or get in touch below.
FAQs about Self Employed Mortgages
How do mortgages work for self-employed people?
The basic principles are the same, but proving your income stability can be trickier. You’ll need strong financial records to convince lenders you’re a reliable borrower.
How many years of books do you need to get a mortgage when self-employed?
Most lenders ask for at least two years of tax returns (SA302s) but some may consider one year in special circumstances. The more years you can show, the stronger your application.
How is self-employed income calculated for a mortgage?
Lenders will typically look at your average income over the chosen tax years, minus allowable business expenses.
How much can I borrow for a mortgage when self-employed?
This depends on your average income, desired loan-to-value ratio (deposit vs. borrowed amount), and lender’s criteria. Generally, expect to borrow less than someone with a salaried position.
Why do self-employed people face difficulties getting a mortgage?
The main hurdle is proving consistent income. Lenders prefer predictability, and self-employment can have income fluctuations.
What are the different types of self-employment?
- Contractors: Working on fixed or short-term contracts.
- Agency workers: Placed on temporary assignments by an agency.
- Zero-hours contracts: No guaranteed hours, paid for hours worked.
- Limited company owners: Income comes from a salary and dividends.
How long do I need to have been self-employed before applying for a mortgage?
In the UK, most lenders typically require at least two years of self-employment history before considering your mortgage application. This allows them to assess your income stability through tax returns and financial statements.
However, there are some exceptions:
- Some lenders might consider applications with one year of accounts, especially if you have a strong track record in your field and a clear link between your previous employment and your current self-employed work.
- Consulting with a mortgage broker can be helpful. We can guide you to lenders who might be more flexible with your self-employment history.
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Even if you haven’t reached the two-year mark, it’s always best to gather all your financial documents and prepare a strong application to improve your chances.