Common Questions about Mortgages for Self-Employed People

Commonly Asked Questions About Self-Employed Mortgages

Guide To Getting A Mortgage When Self-Employed


Who Can Get A Self-Employed Mortgage?


One of the most frequently asked questions is, ‘Who can get a self-employed mortgage’? All lenders view sole traders, partners, or limited company directors as self-employed. All of these categories of employment are acceptable to most mortgage lenders.

Mortgage finance for the self-employed is available through traditional high-street lenders and specialist lenders who may look more favourably on a self-employed applicant. 


Can I Get A Mortgage With An Irregular Income?


When self-employed, your income is often inconsistent: one month, you might earn £5,000, and the next £3,000. In this scenario, a lender might want to average your income over two years to try and work out an accurate average.

Some lenders might insist on seeing your last three months' bank statements to ensure your income has stayed the same recently and that you can afford the repayments not only now but for the duration of the mortgage.

You must be able to afford the monthly repayments because you are offering your home as security, and if you do not maintain them, you may lose your home. While the lender will carry out a detailed income and expenditure assessment, you must conduct your assessments to see that you can easily afford the repayments.


Will The Current Financial Climate Affect My Chances Of Getting A Mortgage?


The current financial climate could prevent you from borrowing as much as you want. All lenders carry out detailed affordability calculations to ensure that you can afford the mortgage you want. The lenders will need to know your monthly outgoings for items such as council tax, gas, electric, food, car running costs, socialising, life cover, other insurances, etc. In the current climate, where energy costs are unusually high and insurance is expensive, the lender may consider that you can’t afford to borrow the amount you require.

The fact that interest rates have risen considerably in the last couple of years also does not help when a lender assesses whether you can afford the loan, as you need more income to cover a higher monthly mortgage repayment.


How Do I Make Myself More Attractive To Lenders?


To stand a good chance of borrowing the amount that you want at a low-interest rate, the following is advisable:

  • A good credit rating /credit score. The higher your credit score, the lower the interest rate you will be offered.

Understanding your credit score is good practice. The leading UK credit reference agencies can give good advice. For example, having many credit cards with high balances close to their maximum limit will harm your credit score.

If you are still determining your credit rating, you can get a report from any major credit reference agency, such as Equifax, Experian, or TransUnion. Obtaining a report for your own purposes will not have a detrimental impact on your credit score.

  • Pay your tax

It's essential to ensure that you are on top of your tax affairs and that you pay any tax bill on time. If you are unable to pay your taxes, then your accountant can contact HMRC to make an arrangement.

  • It should go without saying, be honest.

Answer any questions as accurately as you can. Don’t guess answers thinking it will speed up the application process. If you are unsure what your income has been for the last three years, contact your accountant, who can quickly give you the exact figures.

Ultimately, you could lose valuable time if you don’t complete the application form accurately. Your application will initially be underwritten based on the information provided on the application form. Suppose you own a leasehold property and are asked how many years are left on your lease. You answer “90 years,” but the actual amount of years remaining is only 60 years. In that case, a lender might decline your application immediately as they like to have a minimum number of years outstanding on a lease.


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What Documents Do I Need To Get A Mortgage When Self-Employed?


Proving your income is essential when getting a mortgage and being self-employed. Lenders like to see several items, including an HMRC tax return, an SA302 form, your tax year overview, an SA302 tax calculation, or a certificate from a qualified accountant who can show the company income and your income.

In addition, your accountant may be requested to provide your national insurance number and details of your total income and taxable income.

Other documents may include proof of your identity, such as your passport or driving licence. Additionally, you may need to provide evidence of where you live, such as a recent bank statement or utility bill. They will know your unique taxpayer reference number.

For the mortgage application, the lenders will use your personal income only.


How Do I Contact A Self-Employed Mortgage Broker?


When looking for a professional mortgage broker, it’s recommended that the broker is authorised and regulated by the Financial Conduct Authority (FCA).

A mortgage broker can research the whole market for the best products for a self-employed person. A good broker will have direct relationships with several lenders whom they can speak to specifically about your mortgage requirements.

The broker will be able to look at the self-employed mortgage requirements to apply for a mortgage.

Once they’ve sourced a potential mortgage product, they will provide you with an illustration showing details of the proposed product. This will include the amount to be borrowed, any fees you are being charged, the interest rate, and whether the interest rate is fixed or variable. If fixed, it will show the number of years it’s fixed.

For more information about second mortgages and for independent advice, contact our expert team today.


As a mortgage is secured against your home, your home could be repossessed if you do not keep up the mortgage repayments. Think carefully before securing other debts against your home.

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