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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 info@revolutionbrokers.co.uk.
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:
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 info@revolutionbrokers.co.uk.
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.
Most mainstream lenders require three years of accounts.
Still, the Revolution 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.
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.
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.
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:
Give us a call today, and let's get started!
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The content included in our articles, blogs, web pages and news publications is based on information accurate at the time of writing. Note that policies and criteria can change regularly throughout the UK mortgage lending market, and it remains essential to contact the consultation team to receive up to date guidance. The information included on the Revolution Brokers site is not bespoke to any circumstances or individual application scenarios and therefore is not intended to be used as financial advice. The content we share is designed to be informative and helpful but cannot be relied upon to provide individual advice relevant to your mortgage requirements. All Revolution team members are fully qualified, trained and experienced to provide mortgage advice of an independent nature. We collaborate with lenders and providers who are regulated, authorised and registered with the Financial Conduct Authority (FCA). Should you require specific mortgage borrowing types, some products such as buy to let mortgages may not be FCA regulated. The Revolution team can provide further information about regulated and unregulated lending as required. Please remember that a mortgage is a debt which is secured against your home or property. Your home can be at risk of repossession if you do not keep up with the repayments or encounter any other difficulties in managing your mortgage borrowing responsibly. This also applies to any remortgage or home loan secured against your property, including equity release products.
Revolution Brokers understands that mortgages can be complex and confusing!
Ask us any question you might have, and one of our skilled consultants will come back to you as quickly as possible.
