Being self-employed as a sole-trader, partner or director of a limited company can offer independence and flexibility, but when applying for a mortgage you can be presented with many challenges. This is because most mainstream lenders use a one-size-fits-all approach to underwriting, which often discriminates against the self-employed. When you’re self-employed, instructing a highly competent mortgage advisor is essential as the brokers knowledge of lender criteria, together with the presentation of the application, is of paramount importance.

Established in 2006 as a specialist brokerage, we have a proven track record in arranging mortgages for the self-employed and now have over 1500 self-employed clients. Our expert team of advisors are highly knowledgeable of self-employed income structures whether they be derived from a limited company, partnership, limited liability partnership (LLP), or as a sole-trader. We have direct access to the key decision makers at all the UK’s leading high street banks, building societies and specialist lenders. This level of access coupled with our knowledge of lender criteria enables us to arrange the most complex of mortgages, and where necessary negotiate bespoke terms.

FAQ’s

1. What documentation do lenders required from the self-employed?

· If you’re a sole-trader or partner, lenders will request copies of your tax calculations and corresponding HMRC overviews from the last two years.

· If you’re an equity partner in a law or accountancy firm, they’ll often accept an income reference from the managing partner or finance partner.

· For company directors, they’ll either request the last two years’ tax calculations & HMRC overviews and / or your last two years’ financial accounts for the business.

2. How will my self-employed income be assessed?

· For sole-traders and partners, you can typically borrow up to 4.5 times the average of your last two years’ earnings as evidenced on the tax

calculations or reference, though some lenders will accept the latest year’s figures when profits have increased.

· For company directors we’ll assess your tax calculations and financial accounts and then approach the most appropriate lender depending on the figures highlighted. There can be wide differences in what lenders are prepared to lend to company directors as some will only base their decision on the salary and dividends drawn, whilst others will factor in retained earnings.

· For contractors, special terms apply whether you’re remunerated personally or via a limited company , with lenders calculating your annual income as the day rate x number of days worked per week x 48 weeks.

3. Can I get a mortgage if I’ve only been self-employed for one year?

· In most cases the answer is yes, but it will be dependent on the industry you work in and what you did prior to becoming self-employed.

· If it’s the same industry, most lenders will be comfortable lending to you, but even if it’s a different industry we have access to specialist lenders that frequently provide mortgages when there is only one year of accounting information.

· Contractors are required to have a 12-month history of contracting.