20 Feb 2020
Being self-employed doesn’t need to hinder your mortgage application, say Romford-based property specialists
With the number of people working in self-employed roles having increased from 3.3 million people in 2001 to 4.8 million in 2017, more of us are having to contend with the potential challenges of obtaining a self-employed mortgage.
However, a Romford-based firm of mortgage advisors has said that the challenges might not be as great as many self-employed individuals expect.
Michael O’Brien, Managing Director at Home of Mortgages, said: “How your self-employment affects your ability to obtain a mortgage will depend on factors including your earnings, whether these have risen or fallen over the last three years and the contracts you have in place, as well as how your employment is structured.
If you have a stable income that appears secure, you are likely to be able to benefit from a standard mortgage product at the same rates as an employee.
However, he said that where a person’s income is more erratic or they have been self-employed for a period of less than three years, it can be more difficult to secure a mortgage.
“In these circumstances, a borrower may need to use a specialist lender at a higher rate,” he added. The biggest difference self-employed individuals will face is when it comes to the application process.
Michael O’Brien said: “At this stage, lenders will want to see your accounts, and these will need to have been prepared by a chartered or certified accountant.
They will also require evidence of the income you have reported to HM Revenue & Customs (HMRC) and a ‘tax year overview’.