‘Do you think I would be able to get a mortgage if I am self employed?’ This is a question that we get asked frequently here at Cube Accounting and to be honest there is no clear ‘yes’ or ‘no’ answer. However here are some of the questions we get asked...
I do not have payslips and so what income evidence will I need to supply?
A minimum of two years accounts filed by a certified or chartered accountant. You may be asked to provide evidence of any future income or contracts. You will also need to supply a minimum of 2 or maybe 3 SA302 forms (the forms that you receive after you submit your online self assessment tax return).
Is there a special application process for people that are self employed?
There’s no special mortgage application for people that are self employed, you have to apply for a mortgage and follow the application procedure like everyone else. However, there are a small number of specialist self employed mortgage advisers currently operating in the marketplace.
Will I need a deposit to be able to get a mortgage?
Yes as with almost anyone wanting to get a mortgage, a deposit is important. Some mortgage lenders will stipulate what deposit they will require, but we would suggest that the larger the deposit, the better your chances of a successful application.
Is there anything I can do to improve my credit rating / score?
Paying regularly and on time with any credit accounts, clearing debts and closing accounts that you no longer use are all ways to improve your credit rating and could most certainly make a difference.
Will the status of my business make a difference to me getting a mortgage?
If the status of your business is a sole trader or partnership, these are very often considered in the same way. If you are a partner of a business it will be your share of the net profit that will be taken into account, along with any additional income sources.
As a director of a limited company any regular basic salary income and dividends will be considered alongside the percentage of your shares in the business. If you choose to retain some of the profits in the business, some lenders may take this into account.
Finally, as always we would strongly advise that you keep your accounts as up to date as possible, so that you have all of the possible information available if required.
We hope this blog gives you an insight into the in’s and out’s of getting a mortgage, but do remember that each lender will vary and have their own criteria and so we would strongly advise you do your research and seek professional advice before applying.
Here is a link to the latest list of mortgage providers and lenders who accept SA302 documents.