Mortgages for the Self-Employed

Self-employment is on the rise in the UK as many people feel that being your own boss gives you the opportunity to create and grow a business as a source of primary or secondary income.

Historically, obtaining a mortgage has been trickier for self-employed applicants as lenders exercised caution towards entrepreneurial young businesses. However, in today’s market, mortgages for the self-employed are readily available if you plan ahead. As a broker with access to over 100 lenders who all look at self-employed income differently, it is a good idea to maximise your average profits for two years. For sole traders the lenders like to evidence this on your annual tax calculations and for Limited company directors this can be evidenced through sight of the annual accounts for the business or personal tax calculations.

Lenders want to be comfortable that your business generates sufficient, sustainable profits to cover the mortgage payments for the foreseeable. They acknowledge that profits can fluctuate and this is why they tend to average your latest two years figures. However, there are lenders that will consider your latest years profit if you have seen an improvement and a handful of lenders that will consider applicants with just twelve months trading figures. Some lenders do not require you to take all your profit from the business and pay personal taxes and can be flexible when it comes to retained profits.

Here at Chartwell Funding, our experienced mortgage advisers will walk you through the various underwriting options available to you and simplify the process. We’ll assess your income up front and choose a lender that is both competitive with their rates and fees, but will also consider the application based on their self-employed criteria. With the right mortgage consultant, you can progress your plans for property ownership and growing your enterprise for the future.