Are you self-employed and thinking about buying a home or remortgaging? Don’t worry, it’s easier than you think! You’ll have access to the same range of mortgage deals as employed applicants, but the key difference is the documents you’ll need to show as proof of your income. This is where having an experienced mortgage broker in your corner can really pay off.
Lenders generally consider you self-employed if you own more than 20% of a business that provides your main income. The three main types of self-employment are:
1)Sole trader – You’re the only person who owns and controls your business. You’re entitled to keep all profits after tax, but you’re also personally liable for all losses.
2)Contractor or freelancer – You provide your services or products to a client on a contract basis, for a set amount of time or a specific project.
3)Company director – You’re legally responsible for running the company, which is a separate entity. Your personal income is separate from the business – you pay yourself a basic salary, topped up with dividend payments. As part of this, you’re required to maintain accounts and records, pay corporation tax and inform shareholders if you might benefit from a transaction.
It’s usually best to wait until you’ve been self-employed for two years before applying for a mortgage, to prove you have a reliable source of income. However, if you’ve only been self-employed for a year, it’s still possible to get a mortgage, but your options might be more limited.
The best way to find the cheapest and most relevant deal for you based on your circumstances is arguably by asking for help from a mortgage broker but some people decide to search on their own by comparing lenders online.
This can be time-consuming as in the UK, there are hundreds of lenders, each with varying rates and rules about who they’ll lend to and under what conditions.
We are here to help you every step of the journey and we will complete all of the relevant paperwork for you, liaising with solicitors, surveyors and lenders throughout the process, we want to help you make buying your dream home a more affordable reality, you have peace of mind by contacting us and getting the very best mortgage for your situation. Let us help you make getting the keys to your new dream home a reality.
Your home may be repossessed if you do not keep up repayments on your mortgage.