There is a misconception that self-employed people struggle to get mortgages, this is not always the case. Although different forms of evidence and criteria need to be provided and met arranging a mortgage can be just as simple as it would be for an employed applicant.
Many lenders require self-employed applicants to have a minimum of 2 years trading, some lenders will allow 1 years’ worth of trading however very few. Self-employed applicants’ affordability is based on the figures shown on their tax calculations, most lenders will look at a 2 year average of salary & dividends or the latest figures if they are lower than the previous year.
For directors or shareholders of limited companies, salary and share of net profit can be used if this figure is more favourable. The last 2 years full accounts will be needed for this. If you are self-employed and looking to purchase or re-mortgage a property in the future it is always worth speaking to an adviser sooner rather than later to run some affordability and to put you on the right track.
Contact our Mortgage Advisers Rachael and Josh to find out more.