Self-employed mortgages with no proof of income or accounts

You may find it harder to be approved for a mortgage without proof of a regular income, but there are specialist lenders who you can apply to.

Think carefully before securing debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage.

Many borrowers won’t have any trouble providing proof of their income to get a mortgage, while others, such as freelancers or self-employed people, may struggle. Added to that, the days of being able to get a mortgage with no proof of income are gone in the UK thanks to a ban by the Financial Conduct Authority (FCA) in 2011.

Nowadays, mortgage lenders must make certain that borrowers will be able to pay back any large sums of money borrowed by getting evidence of their income rather than relying on word of mouth. The more evidence provided, the better the mortgage deal can be.

While a loophole has meant that these “self-cert” or “self-certification” mortgages are still available from some lenders in Europe, they do come with considerable risks.

If you’re self-employed, freelance, or receive your income from a range of sources, discover what your options are if you need a mortgage.

What are my options if I’m self-employed and need a mortgage?

If you’re a freelancer or self-employed, you should have access to the same mortgage deals as others. The only difference is that you might find it a little trickier to gather enough evidence to prove you have a regular income and therefore persuade lenders that you’ll be able to make the mortgage repayments.

In order to consider a self-employed mortgage application, lenders in the UK typically ask for at least two years’ worth of accounts including details about your income, expenses and operating costs. You’re likely to get better deals by providing more evidence.

The lender will also review your average earnings from the last few years in order to assess whether you’ll be capable of making timely mortgage repayments. And if your financial situation is particularly complex, you might find that you’re referred to an underwriter.

It may actually help to contact a mortgage adviser if you’re self-employed as you could be matched up with lenders more likely to consider your application and offer you a deal.

Do self-cert mortgages still exist?

While self-cert mortgages are banned in the UK, it may still be possible to get a self-cert mortgage from an overseas lender, but that doesn’t mean you should. In fact, the FCA issued an official warning about the risks of these self-cert mortgages.

The key considerations of getting a self-cert mortgage from an overseas lender are:

  • The lender may act quicker in repossessing your property if you fall behind with repayments.
  • The lender may be more difficult to contact.
  • The lender may add extortionate fees to its mortgage products.
  • You won’t be able to refer any complaints to the Financial Ombudsman Scheme.
  • You won’t be able to claim compensation from a mortgage adviser for recommending an unaffordable product.

If you do decide to go ahead and apply for a self-cert mortgage from a lender outside of the UK, it’s recommended to double check what fees you’ll be charged, how the lender deals with missed repayments and what protections you’ll be offered if things go wrong. A UK mortgage adviser may be able to offer useful advice on this.

Speaking to a specialist lender

If you are struggling to get a mortgage via the traditional methods, you could speak to a specialist lender. They can provide the expertise on a particular area of lending where you’re looking for assistance.

How to improve your chances of getting a mortgage

Here are some steps you can take to try and improve your chances of getting a mortgage:

  • Maintain regular work. By securing regular work, you’ll have regular income coming in, which may prove to lenders that you’ll be able to make repayments.
  • Increase your deposit. Having a larger deposit will reduce the overall sum that you need to borrow from a lender in the first place.
  • A good credit history. This will show to the lender that you manage your finances responsibly and are more likely to meet the monthly repayments.
  • Have at least two years’ worth of accounts. Many lenders require at least two years of account history while others may accept less. But having more evidence could mean better deals will be available to you.
  • Get an accountant to keep your accounts in order. Employing a chartered accountant to pull together your accounts could give lenders extra confidence in your finances. But bear in mind that as you’ll probably want your accountant to reduce your tax bill as much as possible, this could work against you if you want to prove to lenders just how big your income is in order to secure a bigger mortgage.
  • Turn to a UK mortgage adviser or broker. A broker is more likely to be aware of the lenders that are prepared to offer mortgages to self-employed borrowers and which of these offer the best deals.

What about a mortgage agreement in principle?

If you’ve managed to find a mortgage deal, a lender may well offer you a mortgage agreement in principle (AIP) before the purchase of a home is finalised. This is sometimes referred to as a “decision in principle” or a “mortgage promise”, but provides absolutely no guarantee.

You’ll need to submit an application for the mortgage when you’re ready to move, and the lender still has the right to amend the conditions and details of the offer. The lender can also choose to decline the mortgage deal previously offered, especially if, for example, your financial situation has changed.

An AIP is usually valid for up to 90 days, but if there’s a long delay between getting an AIP and applying for a mortgage interest rates could’ve changed, so you may decide to look elsewhere. Consider your timing carefully.

It’s also wise to think about the impact of applying for several mortgage AIPs as each mortgage lender will carry out credit checks, which could have an impact on your credit score.

Bottom line

Once you can prove your income, you should, in theory, be able to access mortgage deals that everyone else can. And the more evidence you can provide to a mortgage lender, the better your chances are at being approved and securing a better deal.

Finder survey: Have you ever had a mortgage?

Source: Finder survey by Censuswide of 1032 Brits, December 2023
We show offers we can track - that's not every product on the market...yet. Unless we've said otherwise, products are in no particular order. The terms "best", "top", "cheap" (and variations of these) aren't ratings, though we always explain what's great about a product when we highlight it. This is subject to our terms of use. When you make major financial decisions, consider getting independent financial advice. Always consider your own circumstances when you compare products so you get what's right for you. Most of the data in Finder's comparison tables has the source: Moneyfacts Group PLC. In other cases, Finder has sourced data directly from providers.

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