Self Employed
How do you prove your
income if you are self employed?
If you are self-employed with a good credit history and
you can prove your income most lenders will offer you
the same deal as an employed person.
The proof of income required varies amongst lenders but
is normally between one to three years worth of audited
accounts. Some lenders will accept declining profits.
The accounts need to be certified by a chartered or
certified accountant in order to be accepted by the
lender as proof of your finances. Many lenders base
their decision on affordability i.e. after taking into
account all your income and all your regular outgoings
can you in the lender's opinion afford the mortgage
payments.
Lenders are interested in seeing how employable you are.
For example a person with a skill that is in high demand
e.g. a plumber is more likely to obtain regular paid
work than a person with a skill where there is limited
demand e.g. a jobbing actor.
Lenders favour low risk applicants i.e. those with a
high credit score and a low loan to value (LTV)
requirement e.g. if you were borrowing £150,000 and the
property is worth £200,000 the LTV would be 75% and
would be classed as relatively low risk. In
circumstances such as these the lender may accept an
Accountant's letter rather than audited accounts.
If you've recently become self employed or work on a
short term contract basis your mortgage may need to be
sourced from a lender that specialises in this area. If
you're on a short term contract it will help if you can
show that the contract has previously been renewed with
the same employer/contractor. The longer each contract
has lasted the better. Lenders may want to see a pattern
of renewals over a one or even a two-year period.
If you are unable to produce audited accounts for the
required period of time, then there is another option
open to you - the self cert mortgage. This type of
mortgage allows you to declare your earnings and certify
them yourself. With self -cert mortgages, the lender
will require a larger deposit, often around 10% although
some will accept 5%. The interest rates are likely to be
higher when compared to self employed mortgages.
Our specialist mortgage advisers will know exactly those
lenders that will accept you as a self-employed borrower
and those that won't and they have access to exclusive
products, many of which are not available on the high
street including self certification mortgages.
Please complete our simple online
enquiry form
today and we will
contact you with a free no-obligation quote, so what
have you got to lose?
The overall cost for comparison is 7.5% APR. The
actual rate available will depend upon your circumstances. Please ask
for a personalised illustration.
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