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Mortgages For Gig Workers

Mortgages For Gig Workers

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The gig economy is booming, with more and more people choosing to work freelance or take out contract work as a more flexible alternative to traditional employment.

However, the Revolution Finance team works with multiple clients who find that being a gig worker means they have found it challenging to find a mortgage, or have been offered rates and terms that are not competitive.

We work with a wide variety of clients from all stages of their freelance career. This guide gives you an overview of how mortgages for gig workers work and how to find the best deals on the market.

For more advice and assistance with finding the right mortgage product for you, give us a call on 0330 304 3040 or email the Revolution Finance Brokers team at info@revolutionbrokers.co.uk.

Am I eligible for a mortgage as a gig worker?

You certainly are; although less common through mainstream lenders, the Revolution team works with a network of lenders who specialise in self-employed mortgages.

We regularly negotiate a diverse range of home loans and gig worker mortgages.

The first criteria is to establish what category of gig worker you fall into - typically, these are referred to as:

  • Sole traders - you run your own business.
  • Partnership - you are self-employed running a freelance gig with a partner or partners.
  • Limited company - you own a small, private business, where, as the owner, you are responsible for the company's debt, and have invested capital into the company.

With most high street lenders offering mortgage products most suited to those in traditional employment if you have struggled to find a mortgage as a gig worker, get in touch, and we will run through the best options with you.

What lending criteria apply to mortgages for gig workers?

The biggest stumbling block for a lot of gig workers is understanding the lending criteria before they make a mortgage application.

Every lender is different, so it is vital to apply to those mortgage providers who you know will consider your application and those who offer lending products that fit with your requirements.

Most lenders will consider factors such as:

  • How much you earn, and will look for at least two years of accounts, ideally with increasing profit as the business grows.
  • Up to date and accurate figures showing your trading income.
  • Your expenses, to ensure that your obligations and outgoings remain affordable alongside mortgage repayments.
  • Credit scoring and credit history - this all depends on the lender, with many lenders being risk-averse when it comes to offering a mortgage to applicants with bad credit. However, Revolution works with specialist lenders who can still consider an offer to lend even if you have bad credit.
  • Whether the business has any debts, negative risk factors, and even considering things such as reviews and business ratings online.

Typically, it is easier to find a lender if you have been self-employed for three years or more, as this means you can demonstrate a more extended period of trading income.

Working with a specialist broker such as the Revolution Finance team expands your potential to apply to lenders who can consider less common circumstances, with mortgages available to applicants who have been trading for as little as one year.

Some lenders will look at future projections alongside trading history. This can include looking at your anticipated future business, asking for copies of contracts, and seeing what qualifications, skills and accreditations you hold to validate the security of the company.

What documents do I need to demonstrate my income as a gig worker?

Usually, you'll be asked for a range of documents:

  • Passport & ID to verify your identity.
  • Two to three years worth of accounts, sometimes including bank statements and invoices.
  • Up to three self-assessment tax returns (SA302 forms). Every lender will ask to see the most recent one, so sometimes it is necessary to file early to have a copy available.
  • Copies of contracts, either existing ones or anticipated new agreements.
  • Your CV to show your history and experience in your line of work.

For limited companies, you'll also need to provide copies of accounts filed with Companies House and will usually be asked for up to date management accounts. Hence, it is wise to ensure your bookkeeping is up to date before applying for a mortgage.

Can I improve my chances of having a gig economy mortgage approved?

There are a few things you can do, which help a mortgage lender assess your application more easily:

  • Use a qualified accountant to prepare your accounts or financial statements.
  • Work with a whole-of-market mortgage broker who can offer recommendations.

How much can a gig worker mortgage provider offer to lend me?

Lenders will look at your business, and use your trading structure as a basis on which to calculate what they can offer to lend:

  • For sole traders, a lender will look at your net income, or average earnings, over the last two to three years.
  • For partnerships, the lender will assess both your income, and that of your partner, or might work on an average income of each partner over the last two to three years.
  • For limited company owners, a mortgage lender will look at your salary, and dividends earned. Some lenders will also take into account the total net profit of the business.

How can I apply for a gig worker mortgage with a changeable income?

Most freelancers will have an income that changes from month to month. Mortgage providers will therefore work on averages and usually consider the most recent complete trading year.

Some lenders will also make an offer based on the year with the lowest income, within the last two to three years.

How do I get started with applying for a gig economy mortgage?

The first step is to contact the Revolution Finance team - as a whole-of-market broker, we work with a wide range of lenders, including specialist providers who are experienced in lending to gig workers.

To improve your chances of approval, there are a few things you can do:

  • Offer a higher deposit. If you can put down 10-15%, you are more likely to receive a mortgage offer with competitive rates.
  • Demonstrate regular income. If you have consistent contracts or long-term contracts, these make your business income more stable. Large gaps between work within the last year or two before making your application can make it more challenging to secure a home loan.
  • Keep excellent records. Your mortgage lender will ask to see information about the trading of your business, including up to date records. Keeping all your documents to hand, having up to date accounts, and being able to provide copies of contracts and bank statements will strengthen your application.
  • Make sure you can demonstrate affordability. A lender will compare your average income to your expenses, so if you can minimise your outgoings before applying for a mortgage, or consider applying for a lower mortgage value, the easier the approval process will be.
  • Check on your credit rating. If you see any errors or anomalies on your credit file, raise a dispute and get all of your obligations as up to date as possible before applying for a mortgage.
  • Use a specialist broker who is familiar with the gig economy, and can recommend suitable lenders who can approve your application.

Expert support with mortgages for gig workers

As a specialist mortgage broker, Revolution Finance works with clients who have a deposit from as little as 10%, and need to find a competitive mortgage that fits in with their self-employed income structure.

Our team has years of experience in the gig worker economy and negotiates with lenders to secure you the lending you need, at the most competitive rates and terms available.

Give us a call, or drop us a message to get started - 0330 304 3040 or email info@revolutionbrokers.co.uk.

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FCA disclaimer

*Based on our research, the content contained in this article is accurate as of most recent time of writing. Lender criteria and policies change regularly so speak to one of the advisors we work with to confirm the most accurate up to date information. The information on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisors working with us are fully qualified to provide mortgage advice and work only for firms who are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs. Some types of buy to let mortgages are not regulated by the FCA. Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.

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