Self employed? Here’s our six top tips to help you get a mortgage

The financial impact of the Covid-19 pandemic has been blunt and potentially long lasting for the self employed, and as the UK opens up post-vaccination rollout, many are still struggling to rebuild back their business to where it was pre-pandemic.

Our recent research of UK self employed workers found that over half (51%) think their financial situation has become worse over the past year, with over a third (34%) applying for government support and one quarter of self employed home owners requesting a mortgage holiday period during the past 12 months to get by.

But while economic conditions remain difficult, our research also shows a great sense of resilience and ingenuity within this sector. Nearly half (46%) said they’ve adapted their business to help them stay afloat, and more than one in ten (13%) have used this time to completely change their business model.

Those who are self employed may be feeling pessimistic about their future home buying prospects after this difficult period, but fortunately there are options available to help. It’s important to seek advice from a broker who can provide whole of market experience and explore specialist lenders options. These lenders can dig into the detail of an applicant who may have complicated income streams and lift those traditional barriers to getting a mortgage.

We’ve put together six top tips if you’re self employed and looking to get a mortgage:

  1. Consider using a broker: The home buying journey can be a complicated journey so having an experienced guide throughout can make all the difference. Brokers have whole of market experience so can outline all the options available to fit your individual circumstances. 
  1. Evidence two to three years of accounts: Lenders will typically ask to look at two to three years’ worth of accounts, as proof you have a good level of income. Since Covid-19, it is also important to show your business has recovered to pre-pandemic levels to instil confidence in the lender you can meet mortgage repayments.
  1. Get your accounts in order: You will need to provide documentation to prove your income, which will vary depending on the lender. Making sure you know which documents lenders will ask of you and having this to hand will save time and help speed up the process.
  1. Evidence a steady stream of work: To prove that you’re a reliable borrower, it’s important to demonstrate a steady stream of work that has been maintained over time. It is equally important to show a strong pipeline of upcoming work to reassure lenders.
  1. Improve your credit profile: There are many ways to boost your credit profile. Simple steps such as registering on the electoral roll, paying off debts and meeting regular payments will over time make a difference. Want to find out more on ways to help improve your credit score? Read our article or watch our broker interview.
  2. Save a bigger deposit: Having a bigger deposit will better your chances of securing a mortgage and demonstrate you aren’t a risk to lend to. Review your monthly expenditure to see where you can afford to cut back and put towards saving for a deposit and utilise fixed term savings accounts to benefit from a more favourable interest rate.

Want to find out more about what a broker does and how they can help you? Read our 10 reasons to use a broker article or watch our Why use a broker? playlist on YouTube

 Subject to status. Your mortgage is secured on your property.  Your property may be repossessed if you do not keep up repayments