Prior to the 2007 credit crunch, self-employed workers could apply for a ‘self-certification’ mortgage, which meant that borrowers didn’t need to prove their income and lenders didn’t carry out checks. However, the system was abused, with borrowers exaggerating their earnings in order to secure a larger mortgage and then being unable to afford the repayments. As a result, ‘self-certification’ mortgages have now been abolished.

Despite common misconceptions, if you are self-employed, on a fixed-term contract or a freelancer you have in theory access to just as many mortgage products as those that are permanently employed. However, you may need to jump through more hoops to prove your earnings to mortgage lenders in order to secure an offer.

When preparing to apply for a mortgage you will need:


Two Years’ Worth of Accounts

As a self-employed worker, it is beneficial for you to minimise your taxable income. Your accountant will see it as his/her duty to employ legitimate methods in order to reduce your tax bill. However, this could count against you, as lenders will base the amount they’re willing to lend you on the average amount of profit you’ve made, so bare this in mind.

You will need to prove your earnings by providing copies of your company accounts, SA302s or tax returns from the past two to three years. Lenders prefer that tax returns are completed by a certified or chartered accountant.


A Continuous Track Record of Work

Mortgage lenders prefer that self-employed workers can demonstrate a continuous stream of employment. If you are a contractor that has several months of your contract remaining or a future contract lined-up, this will also be considered favourably.

If you already have a mortgage and simply wish to remortgage or switch to a better mortgage plan, this will work to your advantage as well, particularly if you’ve made all the repayments on time.


A Healthy Deposit

Having a decent deposit or large sum of equity another property will definitely increase the range of mortgages available to you, so save as much as you can before applying. The larger the deposit, the cheaper the monthly repayments and lower the interest rate will be. If you’re a first time buyer, a Help to Buy ISA will enable you to save up to £200 a month towards your first home, whilst giving you an extra 25% boost from the Government. To receive the maximum Government bonus of £3,000 you’ll need to save £12,000, making your total savings £15,000. To read more about Help to Buy ISAs click here.


A Good Credit Score

Lenders will not only credit check you, they will also credit check your business by running a check on your business address. Your credit rating represents a summary of your credit history and is used by lenders to gauge eligibility for a loan. Checking your credit score before applying for a mortgage will enable you to rectify any mistakes and make improvements. Registering on the electoral role, paying off debts, paying bills on time, cancelling unused credit cards and disassociating yourself from financial partners will all help to better your credit score. To learn more about improving your credit score click here.


Some lenders are more willing to lend to self-employed workers than others. Seeking the expert advice of a mortgage adviser could be beneficial, as they’ll be able to recommend mortgage products that you’re more likely to be accepted for. For a free initial consultation call ADN Financial Solutions on: 02392 822 616.


Your home may be repossessed if you do not keep up repayments on your mortgage.

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