Self-Employed Mortgages

It can be harder for applicants who are self-employed to get accepted for a mortgage, but it’s certainly not as hard as you might assume.

At Mortgage Buddy we can take the legwork out of finding your self-employed mortgage. Get in touch with our simple online form to get the ball rolling.

On this page we’re going to run you through the key information you need if you’re looking to get a mortgage as a self-employed professional or sole-trader.

Match With A Self-Employed Mortgage Specialist

Can I Get A Mortgage If I’m Self-Employed?

Absolutely! There’s technically nothing holding you back if you’re looking for a self-employed mortgage. By that, we mean that there’s nothing about being self-employed for which lenders would automatically decline your application.

The one area lenders do scrutinise a little more for a self-employed mortgage is your income. As a self-employed person, you might have several income streams and you can’t necessarily guarantee a regular income. But with some investigation and a little help from your Mortgage Buddy, that should be no problem.


How Do Self-Employed Mortgages Work?

There are a few specific documents lenders might want to see when they’re assessing your application for a self-employed mortgage.

Your accounts

When you’re applying for a self-employed mortgage, most lenders will want to see at least three years’ worth of accounts. Some lenders will be happy with just two year’s worth of accounts.

You’ll need an SA302 self-assessment document for this. The SA302 is the part of your self-assessment that HMRC will summarise for you. It shows your income from the last year and the tax you owed on that income. There are some self-employed mortgage lenders that will request your full company accounts but nowadays many will accept the SA302 document instead with your accompanying tax year overview.

You can get your SA302 document from your accountant or directly from HMRC by logging into your self-assessment portal.

Record of your regular work

Being able to prove to your lender that you have a regular source of work (both in the past and in the future) is crucial to getting your self-employed mortgage. There’s no particular form this needs to take as long as you have some proof (through a contract, retainer etc.) that you have that regular work, that will do.

Your accountant

Some lenders actually require you to have an accountant to get a self employed mortgage, but not all do so don’t worry if you don’t. The reason some require it is that accountants are supposed to make the company and its accounts look genuine, so there is less likelihood of getting denied a self employed mortgage if you have one but it may help.

If you don’t have an accountant just make sure that your company accounts are up to date before you apply for your self-employed mortgage.

Other helpful factors for getting a self employed mortgage

Just as with any other type of mortgage, you’re likely to get a better deal on your self employed mortgage if you have a large deposit. This will mean that the lender accepts less risk by lending to you and usually results in slightly lower interest rates, and it can make the whole process a little smoother.

It’s also super helpful if you have a clean credit file. If you don’t have a completely clean credit file, that doesn’t mean you won’t get your self-employed mortgage. There are a lot of aspects to your credit file that lenders assess. For example, lenders are generally more concerned with any credit issues you’ve had in the last two years, so if you’ve had any credit issues before that it shouldn’t be a big issue.

Your lender will also probably need you to provide the following:

  • Passport
  • Driving licence
  • Utility bills from the last three months
  • Bank statements from at least the last six months
  • Council tax bill

Is it harder to get a self-employed mortgage?

In theory, self-employed mortgages are the same as those most people have access to. The difference is that it can be more complicated to prove things like income, so the admin associated with these mortgages is often more substantial.

It’s no secret that since the 2007/08 Financial Crisis it’s been harder for most people to get a mortgage than it was before. That’s also the case for self-employed people, but with enough information you shouldn’t have too much trouble finding your ideal self-employed mortgage.

How much can I borrow for a self-employed mortgage?

There are no set rules about how much you can borrow with a self-employed mortgage. Lenders will make a decision on how much they think you can borrow, based on your income or net profit. There are some lenders that decide the amount they can lend based on your declared income from the most recent tax year. And some will make their decision based on your accounts – often two years’ worth of accounts.

Basically, almost every lender has their own way of judging your affordability. It’s because of this that Mortgage Buddy exists – we help you through what can be a confusing and complex process.

What types of self-employed mortgage can I get?

‘Self-employed’ mortgages don’t actually exist. Any mortgages you as a self-employed person are eligible for are essentially just standard mortgages. What’s different is simply the type of assurance you’ll need to give to the lender to make sure you can afford the mortgage.

Can I get a Help to Buy ISA if I’m self employed?

Help to Buy accounts are a way to help first-time buyers get onto the property ladder. As a self-employed person you’d ideally have at least three years’ worth of accounts for your mortgage application. Any less than three years’ worth and you’d have some difficulty in getting that Help to Buy self-employed mortgage.

As of 30 November 2019, you can’t open a new Help to Buy account. Now that the deadline has passed, you could look into getting a Lifetime ISA. It’s almost the same as the Help to Buy scheme and you might actually be better off with that anyway. Read more about getting a help to buy mortgage here.

Do I need proof of income to get a self-employed mortgage?

Yes! Being able to prove to lenders that you have that steady income will make the whole application for a self-employed mortgage that much easier.

It might seem frustrating that lenders could be reluctant to lend to you without that proof of income, but it’s ultimately for the best. It’d be no good for you if you got your self-employed mortgage without proof of income and then realised that you can’t realistically afford the payments.

Luckily your Mortgage Buddy is here to help! We search the market to find the right self-employed mortgage for your situation. Get in touch today.


What type of business do I need to get a self-employed mortgage?

Lenders will take into account what type of business you have when you’re applying for a self-employed mortgage. Being ‘self employed’ in this context means that you own at least 25% of your business.

Here are more details on each business type:

  • Sole trader
    • If you’re a sole trader then you’ll be pleased to learn that this is the simplest business type for a self-employed mortgage. It’s fair to assume that sole traders’ accounts are kept relatively simple – no shell companies, for example. What you’ll need if you’re a sole trader is your accounts and an SA302 document to show lenders your income and tax situation.
  • Partnership
    • For partnerships, the key detail is what share of the profits are yours. As long as you can prove to the lender what your share is, this can also be a simple self-employed mortgage.
  • Limited company
    • Things are a little more complicated if you run a limited company and want to apply for a self-employed mortgage. Personal and business accounts and details are usually separate for limited companies. In this case your lender will need to know what income you take from the business, plus any dividends. It’s important to be transparent and honest with the lender about this. Things are different if you run a buy-to-let limited company, so if that applies to you, you’ll need to do some more research if you want to get a self-employed mortgage.

How can I prove my income for a self-employed mortgage?

What type of income you need to prove depends on the type of business you run. Here’s a breakdown of the income lenders would need to see from you:

  • Sole trader
    • Total income – if you’re using an SA302
    • Net profit – if you’re using your accounts
  • Partnership
    • Your share of the total income – if you’re using an SA302
    • Your total share of the net profit – if you’re using accounts
  • Limited company
    • Your share of the director’s salary
    • Your share of the company dividends
    • Sometimes lenders will consider net profit if there’s been a big business expense or a big amount earned and left in the business.

Get the best self-employed mortgage deal

Every lender has their own criteria for judging whether you’ll be eligible for their self-employed mortgage. It’s a shame that there’s no exact science in putting together the perfect application for a self-employed mortgage, but that’s just how it is.

We can help though! Our self employed mortgage experts know thousands of mortgage products and the best deals inside out and can give you the best chance of getting that mortgage acceptance.

Other factors that you should always bear in mind when you’re looking for a self-employed mortgage include your personal credit history. You could have all the right income numbers and everything else nailed down, but if you have a poor credit history you’ll struggle to get your mortgage. This is why it’s so important to regularly check your credit score and keep an eye out for anything that might hamper your application for a self-employed mortgage.

It’s also important to bear in mind how many years of accounts you have. Most lenders prefer two years’ worth of accounts, but some will accept one year’s worth. If you only have one year of accounts, you’ll probably need to rely on a clean credit file.

How long your business has been trading is also important. For businesses that have been trading for more than three years you’ll have a good selection of self-employed mortgages to choose from. With less than three years of trading, your choices will be more limited.


Does it matter that I’ve already been declined for a mortgage?

Being declined by a lender certainly doesn’t mean you’ll be declined in the future. Because each lender uses their own criteria for assessing mortgage applications, it’s not unusual for some to decline when others might not.

If you have been declined, it’s better not to apply again straight away. For one thing, this can negatively affect your credit file which would certainly make it harder to get a self-employed mortgage in the future. It’s also good to take stock of why you were declined and use that information to potentially improve your next mortgage application.

Can I get a self-employed mortgage with bad credit?

If you’re self employed and don’t have a clean credit file, the last thing you want to hear is that you can’t get a mortgage.

The good news is that it’s not true!

Okay, being both self employed and having a poor credit history will make it harder to get your mortgage, but it doesn’t make it impossible. There are lots of alternative lenders on the market that specialise in lending to people in this situation.

Yes, the application might take a little longer, and yes, you might not get the same deal you’d get if you had a strong credit file. But you certainly aren’t completely out of options. We have lots of info to help get your head around getting a mortgage with bad credit or a CCJ.

Get a quote for a self employed mortgage today using our simple online platform. We know the alternative mortgage market inside out and will be able to find out what kind of deal will get you onto the self-employed property ladder. Get in touch to speak to one of our specialist mortgage advisors today!