Understanding the Challenge

Being your own boss is rewarding, but when it comes to mortgages, it can complicate things. Lenders typically favour a steady income, which can be tricky to demonstrate if you’re self-employed, especially if your business experiences fluctuating income levels.

Preparing Your Paperwork

The key to a smooth mortgage application is preparation. You’ll need to gather at least two years’ worth of accounts or tax returns to prove your income. The more evidence you can provide of a stable income, the better your chances of being approved.

Mortgage companies often ask for:

• Final, submitted accounts
• SA302 submissions and tax year overviews
• 3 months’ worth of business and personal bank statements

Boosting Your Mortgage Chances

There are several steps you can take to improve your mortgage prospects:

• Maintain good records: Keep your business accounts up to date and detailed.
• Minimise your expenses: In the years leading up to your application, try to reduce your allowable expenses to maximise your taxable profit.
• Build a larger deposit: The more you can put down upfront, the less risky you appear to lenders.
• Check your credit score: Ensure your credit history is clean and improve it if necessary.

You might need to start preparing for a mortgage well in advance of wanting one to ensure you have the best chance of success when the time comes.

Choosing the Right Mortgage

Not all mortgages are created equal, especially for the self-employed. It’s crucial to shop around and compare different mortgage products. Using comparison websites or a broker can help you find a deal that’s right for you.

Seek Professional Advice

Navigating the mortgage market can be complex. Speaking with a mortgage broker who understands the challenges faced by self-employed individuals can be invaluable. They can guide you to lenders who are more amenable to self-employed applicants, and do the hard work for you.

Final Thoughts

While getting a mortgage when you’re self-employed may require a bit more legwork, it’s certainly achievable. With proper planning and the right advice, you can find a mortgage that enables you to own your dream home without compromising your entrepreneurial spirit.