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Lenders will calculate your average earnings across the time period of the accounts as part of their affordability checks.
Although some lenders will accept applications with less than three years of accounts, this could harm your chances of being approved for a great mortgage deal.
Except for having to provide extra proof of income, there is very little difference between the eligibility criteria for self-employed applicants and everyone else.
You’ll need to have a suitably large deposit and be earning enough to comfortably afford the monthly mortgage repayments. Most mortgage providers will not lend more than 4-5 times the annual household income of the applicants.
Each lender will have unique minimum eligibility criteria when it comes to an applicant’s credit score. The better your score, the more likely you’ll be approved for a great deal. Even so, there are plenty of options for self-employed applicants with bad credit scores.
If you work with a mortgage advisor, you’ll be best placed to ensure you’re applying for a mortgage you’re eligible for. These professionals have specialist knowledge of the self-employed mortgage market and will be able to recommend the best deals available for someone in your financial position.
Just as with any mortgage applicant, you’ll need to provide proof of identity, proof of address and recent bank statements.
You can submit your accounts via any forms that were certified and submitted to HMRC by a qualified accountant.
Many self-employed applicants choose to submit their SA302 forms, which are issued by HMRC after you submit a paper tax return.
Self-employed applicants are regarded as riskier prospects by mortgage lenders. Here are some steps you can take to convince your lender you’re a reliable applicant.
In the past, self-employed mortgage applicants were able to self-certify their income and still be approved for a mortgage.
However, this practice was banned by the Financial Conduct Authority, as many applicants would abuse these rules and end up in serious mortgage arrears.
It may be possible to obtain a self-cert mortgage from overseas, but this is a risky move. Our self-cert mortgages guide explains all the checks you should make before taking this route.
It’s possible for zero-hour and temporary contract workers to be approved for a mortgage, despite their fluctuating levels of income. Some lenders offer mortgages designed especially for these workers, although applicants will need to demonstrate a level of consistency when it comes to their past and future income. Our guide explains more.
If you are registered with the Construction Industry Scheme, you’ll be eligible to apply for a CIS mortgage. With these mortgages, your affordability is assessed based on your net income, rather than your net profit. Our guide explains how this works.
With no proof of income, it’s going to prove extremely difficult for self-employed applicants to be approved for a mortgage. If you’re in this position, see our guide for suggestions on the steps you can take.
It’s not simple for contractors to be approved for a mortgage, because their income tends to be inconsistent. However, there are several steps they can take to appear more reliable in the eyes of a mortgage lender. You can learn more with our guide.
Company directors are able to access the same mortgage deals as everyone else. However, they are required to provide additional evidence of their income, because their earnings are deemed less reliable than an employee’s wages. Our guide explains how a company director can be approved for a mortgage.
It’s possible to apply for a buy-to-let through your limited company, rather than as an individual. In this case, your affordability assessment will be based on your company’s earnings. Often, this process can save you a lot of money. Our guide explains how it works.
Sole traders have access to the same mortgages as everyone else, although it might be particularly difficult for these individuals to provide evidence of consistent income. Our guide provides step-by-step advice to help them.
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