Self Employed Mortgages | Leicester
Being self employed has its advantages, you get to be your own boss and control when you work, however, it still comes with challenges, especially when it comes to mortgages. At Mortgages by Anna, we specialise in helping self employed clients arrange a mortgage with no issues. With access to the ‘whole of market’, we can choose between high street banks, building societies and specialist lenders for your application.
Last Updated: 25th August 2023
What are Self Employed Mortgages?
Self employed mortgages are home loans specifically designed for individuals who work for themselves or run their own businesses. Unlike traditional mortgages, which are tailored for people with regular jobs and pay stubs, self employed mortgages consider the unique financial situation of self employed individuals.
Being self employed means that your income may vary from month to month or year to year, and you might not have the same employment documentation as traditional employees. Self employed mortgages take this into account and provide options for self employed individuals to qualify for a mortgage.
Documentation Requirements
When applying for a self employed mortgage, documentation plays a pivotal role in proving your financial stability. Be prepared to provide:
Tax Returns: The last 2-3 years of personal and business tax returns.
Profit and Loss Statements: Demonstrating your business's financial health.
Business Financial Statements: Balance sheets and cash flow statements.
Business Licence and Registration: Proof of your business's legal existence.
Contracts and Agreements: Ongoing contracts that support your income claims.
Credit History: Your creditworthiness is assessed based on your credit history.
Specialist Lenders for Self Employed Mortgages
Each lender will have their own set of criteria for you to meet as a self employed individual, you may meet some and not others. The advantage of using Mortgages by Anna, is we can save you time and money finding the right lender for your application.
Most self employed individuals, whether they’re a freelancer, contractor, or sole trader, can have issues illustrating affordability to a lender due to the way in which they may be paid.
Different companies have varying strategies when it comes to cashflow and the management of balance sheets etc and some lenders may not appreciate the structure you present. However, as a specialist broker for self employed mortgages, we know how to present your income, which may include dividends and retained profits, and then we can recommend specialist lenders who take this into consideration.
Since Covid, lenders have become more stringent in their approach to mortgage underwriting and have taken more of a risk adverse attitude when assessing affordability and especially that of a self employed individual. Many mainstream lenders on the high street will have a narrow set of criteria that you are unlikely to meet, but don’t let this dishearten you, we could help.
How much can I borrow for a Self Employed Mortgage?
As you can imagine, this depends on your income and how the lender calculates your income. As mentioned above, different lenders will take different things into consideration when it comes to a self employed application. That’s why it’s even more imperative to seek the advice of a specialist broker.
Some lenders will base the figure on your latest declared income, others will take an average of the last 2/3 years. Some lenders will apply different criteria to how they consider salary, income and dividends from a limited company.
Our experience in the self employed mortgage arena provides us with the necessary confidence to find the right mortgage to meet your needs. Let’s get started. Simply get in touch with Anna on 0116 3262610 or send an enquiry online.
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