Almas Uddin
Founder and Mortgage Advisor
19 Dec 2023
Need Help Finding A Self-Employed Mortgage?
Have you been turned down for a mortgage based on your self-employment income? Or find it impossible to know which lenders offer the best rates?
The great news is that it shouldn't be any harder to get a mortgage as a self-employed person, and our experienced brokerage team can identify some of the best products on the market from networks of respected lenders.
Business finance broker are on hand to help self-employed professionals find the most competitive mortgage lending possible. In this guide, we've summarised the key things you need to know about how self-employed mortgages work and how terms vary between lenders.
For more support with finding the right lending for you, get in touch with our experienced team at 0330 304 3040 or send a message to [email protected].
Self-Employed Mortgage Advice From Revolution Finance Brokers
Our team of experienced brokers deal with self-employed applicants every day.
We know that navigating the world of specialist mortgages can be complicated, especially where your existing banking provider isn't able to support your application.
However, while it's common to expect to use your regular bank for a mortgage, it may be that they aren't close to being the most competitive lender, and a niche mortgage provider may be far more affordable.
Self-employed products aren't typically an individual product but are a mortgage that is adapted to meet the requirements of an applicant who runs their own business - usually, this includes:
- Sole traders
- Partnerships
- Limited company directors
If you fall into one of these business categories and would like specialist advice in securing the most competitive mortgage rates on the market, contact Revolution Brokers at 0330 304 3040 or drop us a message at [email protected].
How Can I Choose the Best Bank for Self-Employed Mortgages?
As mentioned above, when we talk about a self-employed mortgage, we mean a home loan like any other but structured around a self-employed applicant.
Given the variability of a self-employed person's income, each mortgage is bespoke, meaning that a broker has more flexibility when negotiating a deal on your behalf.
The most significant difference between a self-employed mortgage and a standard home loan is how affordability is calculated.
Unlike an employed applicant, your income is likely to change regularly.
However, by using a specialist broker, there is no reason you cannot borrow on the same terms as any employed person, provided you have evidenced your self-employment history for the requisite period.
Banks all work on different policies so that you won't get the same rates and self-employed mortgage products from two lenders - it's essential to assess your circumstances and apply to a bank that will accept your application.
How Can a Self-Employed Mortgage Advisor Help?
Most mainstream lenders require three years of accounts.
Still, the Revolution Brokers team works with a network of niche mortgage providers who can accept applications from self-employed people who have been trading for a shorter period.
If you haven't been trading for three years or want a lender to consider your profits from the last year, it's essential to work with an independent broker since these terms are a little outside the norm.
For example, you might find it challenging to secure competitive self-employment mortgage rates through a bank or be rejected outright if you don't have three years of tax returns or business accounts.
However, a specialist, self-employed mortgage advisor can connect you with niche lenders and lenders who deal only in broker-exclusive lending, with far greater flexibility around their terms.
Typically, the maximum a mortgage provider can lend is calculated as up to 4.5 times your average annual salary, so it's also important to work out your income average in advance and make sure it's sufficient to get the mortgage you need.
Again, lenders have varying criteria, so Revolution will advise whether one self-employment mortgage advisor is best suited to your application if they lend a higher multiple.
How Can I Find Self-Employed Mortgage Advice?
Applying for a self-employed mortgage is the same as for any other type of mortgage, with the only significant difference being how you demonstrate your income.
Ideally, lenders like to see two to three years worth of accounts - although you can find lenders with more flexibility around your trading history by working with a broker.
The deposit required against your property is also unchanged, with the average being a 10% minimum requirement. Some lenders will offer a higher Loan to Value (LTV) ratio and provide lending with a 5% deposit.
If you have been self-employed for less than a year or have seen your business income change dramatically in the last few years, you will usually be asked to put down a larger deposit.
This requirement also applies to other scenarios where a lender will consider higher risk, such as adverse credit history.
To secure the best rates and most competitive mortgage, working with a specialist broker such as the Revolution team is vital. With years of experience in negotiating self-employed mortgages, we can pinpoint the best lenders to apply to and secure favourable rates.
Which Are the Best Mortgage Lenders for Self-Employed People?
A variety of lenders offer quality self-employed mortgages.
In some cases, a high street bank might be happy to accept your application, and in others, a niche lender might offer competitive rates that make your mortgage far more affordable.
However, looking solely at advertised self-employment mortgage rates isn't always the correct way to decide where to apply.
For example, a mainstream lender with exceptional rates might also have high arrangement fees, making that attractive mortgage more expensive than competing products.
Likewise, they could have struct application requirements and turn down 90% of the self-employed applicants because they can't meet the eligibility criteria.
Building up failed applications isn't just frustrating. It reduces your chances of mortgage approval elsewhere, as multiple hard checks on your credit file can be damaging or make any pre-existing credit issues look like more of a serious problem.
The only sure-fire way to find the best mortgage lender for your self-employed loan is to contact an independent, whole-of-market broker to assess your requirements and match you with the most suitable lender.
Help From the Self-Employed Mortgage Advisor Team
Revolution Brokers aims to take the time and stress out of your mortgage application and work with you throughout each stage of the process to ensure you have the highest possible chance of approval.
The process works like this:
- Send us over an enquiry on [email protected] or give us a call on 0330 304 3040.
- We'll chat about your circumstances and arrange a convenient time to talk with one of our brokers specialising in self-employed mortgages.
- Once we know a little more about you and the lending you need, we will scour the market to find the ideal deals and optimal rates and identify a shortlist of the best lenders to apply to.
- We consult with you, decide how best to proceed, and ensure you have all the documents and information you need to support a successful mortgage application.
Give us a call today, and let's get started!
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