Self employed mortgages.

There are several steps you can take to prepare for your self employed mortgage application – here are our five top tips:

1. Have business accounts signed off by a suitably qualified accountant and obtain a certificate confirming this.
2. Obtain SA302s (a receipt from the HMRC confirming earnings).
3. If approaching a year end, prepare predictions of your year end position.
4. Have credible earnings/business forecasts in place to show if earnings are likely to remain at the same level or above in future years.
5. Provide evidence of previous contracts and evidence of time remaining on current contracts.

A bonus tip? Sure – and this one’s a biggie. In order for us to assess your mortgage affordability, and therefore how much we’ll be able to lend to you, we’ll only be able to use your declared income. You may wish to discuss this with your accountant to make sure you’re in the best possible position for your future mortgage application.

If you have fewer than two years’ accounts you may find your options are reduced. However, you may be in luck with just one years’ accounts if you can also provide evidence of work history in the same field. From time to time we offer specialist self employed mortgages for this scenario so check our mortgage finder to see what is currently available.

Self certification or ‘self cert’ mortgages used to be available to the self employed where little or no evidence of earnings was required by mortgage providers. Whilst convenient and easy for the self-employed to use, sadly the self cert scheme was not properly used in some cases.

From the Mortgage Market Review (MMR) completed in 2014, new mortgage regulation brought in tighter controls for all mortgage applications, with lenders needing to carry out strict affordability checks to make sure the mortgage would be affordable into the future. The intention of MMR rules was to prevent excessive borrowing, ensuring that homeowners can pay back their loan should interest rates rise in the future.