As a Maidenhead mortgage broker that’s been helping self-employed people get on the property ladder for almost two decades, it never fails to amaze us how many people think that getting self-employed mortgages is the borrowing equivalent of climbing Everest.
Yes, there are a few nuances – sometimes even challenges – to overcome. However, there are a lot of misconceptions out there, too.
So, to try and explain to those who are considering applying for a self-employed mortgage, we’ve put together a brief guide to self-employed mortgages.
- Is it hard to get a self-employed mortgage?
As with all mortgage applications, you need to be able to demonstrate how much you earn. For self-employed people, who perhaps pay themselves in non-conventional ways (which typically means not through PAYE), this is sometimes a little harder to illustrate than it is for those who are employed, and who can simply present payslips. But it’s not impossible. It’s also where a good mortgage broker can guide you and help you clear the extra hurdles that will need jumping if you are self-employed.
- I’ve not been self-employed long – can I still get a self-employed mortgage?
Ideally, you’ll need a couple of years’ worth of company accounts, as it’s from these documents that lenders will be basing a decision. But don’t worry if you’ve only just become self-employed. Pay slips from your last employed role will help to build a picture of your income vs affordability. A self-employed mortgage specialist will be able to guide you through this process and gather everything they need to make a strong application on your behalf.
- Are self-employed mortgages more expensive?
In the mortgage world, there are a number of specific mortgage categories. Examples include first time buyer mortgages, adverse credit mortgages and buy to let mortgages. However, self-employed mortgages aren’t so much unique products – they’re the same mortgages that employed people have access to. The difference is the way they’re treated during the application. And this really is where the benefits of using a mortgage broker become clear. Self-employed mortgages don’t require some Herculean feat; they just need to be handled properly by people who know how to navigate them. A mortgage broker is undoubtedly best placed to manage this.
- I’m both employed and self-employed, so what am I classed as?
Simply put, a lender will class you as self-employed if you own 20 – 25 per cent of a business that provides you with the majority of your income. But the more you earn the better your affordability is likely to be, so even if you span both types of employment but are classed as self-employed, being able to demonstrate that you have additional income will only strengthen your case.
Are you self-employed and currently looking for self-employed mortgage deals? If so, we can help. Contact our team of Berkshire mortgage brokers to get the ball rolling. You can reach us on 01628 560820 or by emailing enquiries@altonmortgages.co.uk.