Solving the mortgage puzzle for the self employed

The self employed, contract workers and those working freelance are often ignored by traditional mortgage lenders. But specialist lenders can offer a solution.

As a self-employed person you probably know more about good financial practice than many people in 'safe' conventional jobs. You should do, as your livelihood depends on it. The same goes for contract workers, freelancers and those with second jobs.

So why is it that many mortgage lenders will not provide you with a home loan, even if it is perfectly obvious that you would not have the slightest problem in meeting the repayments? There is no easy answer to this question, but it is true that many lenders will not view you in the same positive light as a full time employee.

As a mortgage broker specialising in self employed mortgages, we have access to the whole market in the UK including specialist lenders which you can only access through authorised advisers such as ourselves. Our expertise in this field allows us help self employed customers get the home or property they want. Because of our independence we will source the best mortgage deals for you. Whichever kind of borrower you are, a first time buyer, looking to move to your next home, wanting to remortgage, a buy to let investor or have a poor credit history, in today's uncertain market is pays to seek advice from a specialist broker.

The self employed workforce is growing

There are now 4.6 million self-employed people in the UK, yet so many high street lenders appear not to be interested in them.

  • Self-employment is higher than at any point in the last 40 years. (source: ONS Self-employed workers in the UK - 2014)
  • 15% of UK workers are now self-employed. (source: labour market statistics accessed 27.10)
  • The rise in total employment since 2008 is predominantly among the self-employed. (ONS self-employed workers in the UK - 2014)
  • Average income from self-employment has fallen by 22% since 2008/9. (source: ONS Self-employed workers in the UK - 2014)
  • The number of women in self-employment is increasing at a faster rate than the number of men. (source: ONS Self-employed workers in the UK - 2014)
  • The number of over-65s who are self-employed has more than doubled in the past five years to reach nearly half a million. (source: ONS Self-employed workers in the UK - 2014)
  • The most common roles are working in construction and taxi driving, and in recent years there has been an increase in management consultants. (source: ONS Self-employed workers in the UK - 2014)
  • See the specialist

    Traditional lenders may only agree a mortgage if as a self-employed borrower your business turnover shows a year on year increase. Or they may demand to see business plans drawn up for a specified period in the future. If you have been in business for less than three years, they may simply reject your application out of hand. But do not despair. A specialist mortgage lender understands all the issues at stake here and will judge each case on its own merits rather than go by strict, pre-set lending criteria that may exclude many perfectly acceptable borrowers.

    More flexible and understanding

    Specialist mortgage lenders are more flexible and understanding than the high street giants, although they do generally ask that you have been self-employed for a minimum of twelve months. While it is true to say that in the past the range of mortgages available to the self-employed was limited, there are more and more products provided by specialist lenders these days, including discounts, fixed rates and flexible mortgages along with others. Even if you have a bad credit rating there are deals available.

    Only 1 year's accounts

    Some specialist lenders with accept only 1 year's accounts regardless of trading period. Some lenders will also accept SA302s for the same period (This is effectively a receipt from HMRC that confirms how much tax you have paid on your earnings) No minimum trading period

    The market is growing

    There are now 4.6 million self-employed people in the UK, yet so many high street lenders appear not to be interested in them. Fortunately, there are a small number of lenders who work on a case by case basis, meaning they are more friendly towards self employed borrowers.

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