We use cookies on our site to enhance your browsing experience. Learn more Accept Home Mortgages Protection About us Contact us Getting a mortgage if you're self employed Home Mortgages Getting a mortgage if you're self employed Contrary to popular belief, if you're self-employed and looking to get a mortgage, you will have access to the same range of mortgage deals as an employed applicant, however obtaining proof of income may prove more difficult, especially if you've only just become self-employed. In this article How do self-employed mortgages work? What proof of income do I need for a self-employed mortgage? Can I get a mortgage with one years accounts? Do self-certification mortgages still exist? How do self-employed mortgages work? Self-employed mortgages work like ordinary mortagages are available to first time buyers, home movers, buy to let investors and those looking to remortgage. As with employed applicants, you will be asked to complete a mortgage application and pass strict lending and affordability criteria which vary from lender to lender. The amount lenders will actually lend to those that are self employed or company directors can vary dramatically. All lenders use some form of affordability calculator to work out what they will lend, the problem is that they will have different ways of calculating income. Some lenders will use an average of the last 2 or 3 years income, whilst others will work just on the latest year's figures. Additionally some will gross dividends up, whilst others will include retained profit. That's why it's important to speak to a qualified mortgage broker to find the best mortgage deal to match your individual circumstances. What proof of income do I need for a self-employed mortgage? Generally, the longer you have been self employed, the better. This allows the lender to assess your income over several years. Typically, lenders require: SA302s covering two to three years. An SA302 is a summary of the income you have declared to HMRC Two to three years accounts or one year plus a projection. Lenders and deals will be restricted where applicants have only been trading for a year Evidence of the last 12 months' contracts if you're a contractor plus any upcoming or rolling contracts. It is worth noting that as a result of the COVID-19 pandemic, lenders are now requesting three months' business bank statements. Lenders will assess whether turnover has been affected since the last accounts were submitted. Some lenders have reduced the loan-to-value for self employed applicants, whilst others have reduced the affordability for self employed, plus some won't lend if bounce back loans have been taken. Can I get a mortgage with one years accounts? Undoubtedly self-employed applicants with three or more year's accounts are in the strongest position when applying for a mortgage but there are lenders that will consider just one year's accounts. Provided you have a qualified accountant drawing up accounts year to date, some specialist lenders will even consider 9 months of trading. Options however are limited and it may be better to wait until the full year's trading is complete. Can I get a one year self employed mortgage with bad credit? Some lenders will consider a mortgage if you've been self employed for just one year and have bad credit, albeit with restrictions. You might need a 15% deposit and no defaults, CCJs or mortgage arrears will be allowed in the last two years. Can I remortgage with one year's accounts? Remortgaging when you've recently become self-employed typically carries the same criteria as purchase mortgages. Accounts need to be signed off by a qualified accountant or proof of income evidenced by SA302s. Do self-certification mortgages still exist? Self-certification or self-cert mortgages were a popular choice for individuals that could not prove their income. It often led to applicants overstating their income to obtain larger mortgages and due to widespread abuse, self certification mortgages were banned by the Financial Conduct Authority in 2014. Request a call back 0115 9499988 Place your confidence in our experts to secure your next mortgage. Submit your details for a free telephone consultation. Depending on your circumstances a fee between 0-1.5% of the loan amount may be payable. A typical fee is £350. We source from the whole of the market for mortgages and from a panel of providers for insurance. Your home may be repossessed if you do not keep up repayments on your mortgage. Premier Mortgage Services is a trading name of Premier Mortgage Services (Nottingham) Limited, which is an Appointed Representative of Stonebridge Mortgage Solutions Ltd, which is authorised and regulated by the Financial Conduct Authority. Registered in England and Wales No 3476608. Registered office: 10 Derby Road, Stapleford, Nottingham, NG9 7AA. © 2021 Premier Mortgage Services Cookies policy Privacy policy