Mortgages for the Self Employed
Typically self employed people get a bad deal with getting competitive mortgages. The reasons why are obvious; to the lender they are a risk, an unknown quantity. They could earn £100,000 one year, but only £10,000 the next year, so it’s clear why lenders are cautious.
Traditionally self employed people had to go for self certified mortgages which means you need no proof of income. It may sound ideal but the rates are much less competitive, usually 1% to 4% above normal mortgages which is quite costly.
Over the last few years with more and more people working on casual contracts and freelance work lenders are becoming more flexible. If you can prove your income over the last three years then you stand a very good chance. Proof will need to be provided by a certified, or better yet a chartered accountant. Many lenders will accept your tax SA302 form which show your income declared to the tax office. For those with less than 2 years proof may find it difficult to get anything other than a self certified mortgage.
If you are self employed and your partner is on fixed income then this will make your chances of securing a competitive mortgage much improved.