Self-Employed Mortgages – what documents are required?

How is a Self-Employed mortgage different?

As a Self-Employed mortgage applicant, there is nothing different about the mortgage product that you will apply for. The only way your application will differ is in its assessment by the Mortgage Lender.

Mortgage Lenders need to feel confident that both Self-Employed and employed people have a stable source of income. As Self-Employed income is considered to be less stable on the whole, they will seek to establish an average income for you, to mitigate some of the risks. This is usually calculated from the past two to three years of accounts.

What documents are required to prove Self-Employed income?

The precise documents required to prove your income will depend on the nature of your Self-Employed business activities, as per the below:

Limited Company Directors

Limited Company Directors are assessed based on an average of their personal salary and dividends over the past two to three years. Proof required is:

• Two to three years of certified accounts
• Tax Calculations (SA302’s)
• Tax Year Overviews
• Business bank statements

Partners

As the partner of a business, you must own 25% or more for that income to be included as income towards your mortgage application. The loan will be calculated based on your share of the net business profits. Proof required is:

• Two to three years of certified accounts
• Tax Calculations (SA302’s)
• Tax Year Overviews
• Business bank statements

Sole traders/ Freelancers

Lenders will use an average of your income for the past two to three years to establish a figure on which they will base your loan amount. Proof required is:

• Tax Calculations (SA302’s)
• Tax Year Overviews
• Business bank statements

Proper preparation can be key to successfully obtaining a Self-Employed mortgage. Doing the following prior to your application will improve your acceptability.

Financial preparation

If you usually don’t use an accountant, it’s important to ensure all of your accounts are signed off by a certified accountant before you submit your application. If you’re a Limited Company Director, increasing your dividends payments for a period of time before applying for a mortgage, could help you achieve higher borrowing.

Credit Rating

To improve your credit score:

• Make sure you’re on the electoral roll
• Correct address and other details held about you
• Minimise credit card spending
• Repay current debt

Deposit

Offering a deposit above the minimum requirement can help you to access better mortgage deals and improve your chance of acceptance.

Speak to Blue Pepper Mortgages

The Blue Pepper team of Mortgage Brokers are specialists in the field of Self-Employed mortgages. We can access those independent Mortgage Lenders who are more accommodating of Self-Employed applicants.

We can speak to you in advance of your application to help you prepare the documentation that will be required. With extensive knowledge of the intricacies between different Mortgage Lenders, we can ensure you approach the right lenders with the right paperwork in place. This will speed up the application process and help you move into your new home quickly and efficiently.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE