Self Employed Mortgages

There are over 3 million people in the UK who potentially need this type of solution to borrow for the purchase of their home. These people may have a problem finding a home loan from a mainstream lender. Those in standard full time employment are pretty much guaranteed to be paid,and can get references from their employer to prove as such as well as having payslip's to prove their income. Mainstream lenders like this sort of "Guaranteed" income as it cuts down on their risks.

Should you need a self employed mortgage because you work for yourself or are working on a short term contract you could be financially sound and able to keep up payments easily. But it might be difficult for you to prove you can keep up payments to your lender. Lenders want to know that the individuals they lend money to are able to keep up payments for 25 years not just in the short term. If you are on a short term contract you are not guaranteed to get another contract. If you are self employed you may not be able to guarantee work coming in on a regular basis.

Many mainstream lenders want to see three years audited accounts from a certified accountant before they consider a mortgage for the self-employed. Should you not have three years accounts you may be able to get a self-certification mortgage by declaring your income and providing a certificate from your accountant (Including your last few years mortgage statements etc).

Recently some specialist lenders have targeted the self-employment mortgage market by providing innovative solutions that offer a more flexible approach to match the working pattern of someone who is self-employed. They accept that when people are self-employed they may enjoy periods of high income and may also suffer from periods of low income. Ideally your home loan should reflect these factors enabling you to overpay and underpay when you need to. These factors should also be taken into consideration when you apply for your home loan.

Mainstream lenders used to be more accommodating. They offered self-certification loans and non-status loans where financial status wasn't confirmed by an employer. Unfortunately they rarely do this now and their lending criteria has become far more strict. You will need to show an upturn income every year and possibly business plans for the future in addition to a large deposit as they only usually lend up to 75% of the value of a property on a home loan of this type.

Self Employed Mortgages :