Introduction
Getting a mortgage when you are self-employed can feel complicated. One of our most common questions we get asked is, “Can I get a mortgage if I’m self-employed?” The short answer is yes, but there are some things you need to know to make the process smoother. At BDC Specialist Finance, we specialise in complex cases and can help self-employed clients navigate the rules and find the right solution for their situation.
Why is it harder to get a mortgage when self employed?
Lenders like certainty. When you are employed by a company, your income is regular and easy to verify. Being self-employed can make this trickier- your income may fluctuate, and you may have more complex tax or accounting records. This is why some lenders are stricter and why having a specialist mortgage adviser can make a big difference.
Self employed mortgage requirements in the UK:
Required documents:
- Tax Documentation: Your SA302 forms/ Tax Year Overview from HMRC for the last two to three years.
- Bank Statements: Personal and, if applicable, business bank statements for the last three to six months.
- Certified Accounts: Two or more years’ certified business accounts, ideally prepared by a qualified accountant.
Key requirements:
- Proof of Income: Lenders need certified proof of your earnings to assess affordability.
- Affordability: Lenders will assess all your income and outgoings and run a stress test to ensure you can still afford repayments if interest rates rise.
- Trading History: Most lenders require you to have been self-employed for a minimum of two years. Some will consider 1-year self-employed.
How long do you need to be self employed to buy a house?
Many people ask, “How long do you have to be self-employed to buy a house?”. While the standard is two years, there are lenders who consider clients with one year or even less in some cases. The key is to show stability in your income and provide accurate documentation. This is where a mortgage adviser can guide you to the right lenders.
Getting a mortgage: when self employed for less than one year
If you are newly self-employed, it is still possible to get a mortgage under certain circumstances. Lenders may want to see contracts and a track record of previous employment, amongst other things. Contractors can be considered in this manner. We have a team of specialist advisers that can help you prepare everything to maximise your chances.
How much deposit do you need for a self employed mortgage?
Deposit requirements for self-employed applicants are generally similar to employed applicants, but some lenders may ask for a slightly higher deposit to reduce their risk. Most people can expect to need at least 5 to 15 percent, but this depends on your income, the property, and the lender.
How much can I borrow as a self employed applicant?
The amount you can borrow depends on your income, outgoings, and credit history. Lenders have different calculations for self-employed applicants. Some use the last two years of income, while others focus on net profit or adjusted income. We can help you understand your borrowing potential.
To conclude…Can I buy a house as self employed?
Absolutely. Thousands of self-employed people buy houses every year. With the right guidance and preparation, you can secure a mortgage that fits your situation. Working with a specialist adviser who understands self-employed mortgage UK rules can make the process faster and less stressful.
Why work with BDC Specialist Finance
At BDC Specialist Finance, we specialise in helping self-employed clients get the mortgages they need. We understand the challenges you face and know which lenders are most likely to consider your application. From helping you meet self-employed mortgage requirements UK to finding the best deal for your situation, we are here every step of the way.
Whether you are newly self-employed or have been running your business for years, we can guide you through the process, answer your questions, and make sure you have the best chance of success.
