Taking your self-employed status into account, securing a mortgage might seem complex, but it’s completely achievable. Whether you are a freelancer, contractor, or a limited company director, the mortgage options available to you are the same as for salaried employees. The difference lies in how lenders assess your application and income fluctuations.Â
At Mortgage Knight, we simplify this process by guiding you through every step and connecting you with lenders who understand your unique financial situation. Let us handle the details and find a mortgage solution tailored to your self-employed lifestyle, saving you both time and effort.
Getting a mortgage as a self-employed professional or freelancer is entirely feasible if you meet the lender’s criteria. While the process is similar to that of employed individuals, you’ll need to provide different types of documentation to prove your income.Â
You don’t necessarily need a specialist lender; a standard lender will review your financial information to determine your borrowing potential. For specific details on the required proof and documents, see the sections on Proving Income and Documentation Required.Â
Remember, if your circumstances involve non-standard construction mortgages, discussing this with your broker is crucial.
From graphic designers to builders, many self-employed professionals qualify for mortgages.
Use the same mortgage products and lenders as employed individuals.
Provide detailed proof of income to support your application.
Address non-standard construction mortgages with your broker if needed.
Your job type doesn’t limit your mortgage options as long as you demonstrate affordability.
Self-employed individuals need specific documents to apply for a mortgage. This includes 1 to 3 years of accounts, tax calculations, proof of ID and address, and recent bank statements if required. If your tax returns are lacking, you may need to supply additional documents like invoices or client contracts.
Submit 1 – 3 years of detailed accounts
Include tax calculations and summaries for the past 1 – 3 years.
Provide valid identification and address verification.
Recent statements may be needed.
Invoices and contracts might be requested.
Income calculation for self-employed mortgages varies. Sole traders’ average net profit over two years is usually assessed, while limited company directors’ salaries and dividends are reviewed. Some lenders also consider future earnings forecasts.
Average net profit from the last 1 years is used.
Assess salary and dividends from 1 years.
Some lenders use forecasts for additional insight.
Different lenders have varied income calculation methods.
How you present income affects calculations.
Freelancers or Self-employed with variable income can still get a mortgage. Lenders may be concerned about income stability, so showing that your income is steady or growing helps. While some may be cautious, others consider your average annual income for approval.
Prove steady or increasing income to improve chances.
Some lenders review annual averages.
Different lenders handle fluctuating income differently.
Demonstrate your ability to make consistent payments.
It can impact lending decisions but isn’t a deal-breaker.
Self-employed individuals should explore various mortgage options to find the best fit. Consider different interest rates, save a larger deposit, and evaluate mortgage configurations to boost approval chances and maximize borrowing potential.
Compare fixed and variable rates.
A bigger deposit can improve your application.
Explore different mortgage setups
Understand factors affecting approval.
Different options can influence your maximum loan amount
