Can you get a joint mortgage if one applicant is Self-Employed?

Yes, you will certainly get a joint mortgage even if one applicant is Self-Employed. It doesn’t make a huge difference being Self-Employed but the process of proving your income can be longer. If one applicant is on the PAYE payroll salary it can be worth them being the first named just as their past income is easier to access.

Anyone who is named on the mortgage agreement will be liable for mortgage repayments on your mortgage and if you do not keep up with them, your home may be repossessed. A joint mortgage is a big responsibility.You will both need to decide amongst yourselves how you share the equity and how the payments are made. If you sell the property, the profits will be split amongst both participants named on the mortgage agreement.

How much can I borrow if one applicant is Self-Employed on a joint mortgage? 

Applying for a joint mortgage can be a good option to be able to combine two incomes and potentially borrow more in total for your mortgage. Lenders will allow you to borrow up to 4.5 times your annual combined income, higher earners may get 5 times salary and in certain circumstances 5.25 times. This does vary among lenders and it is important to look at what you need to fulfil in terms of the lender’s criteria before approaching.

Lenders will run an affordability check in which they will check your income and your credit history too. It is important to have a good credit score in order to access the lower mortgage rates too. If you have bad credit, then you can be at risk of receiving higher rates of interest due to being a higher risk borrower.

A lender will look into your income and assess how much they think you can afford to borrow. You need to think about how you are going to approach a lender and ensure you have the right documentation to prove to them how much you are earning. As a Self-Employed applicant you should think about if you are going to apply for a mortgage as a Limited Company or as an individual.

To know the right decision for you it is best to seek expert advice from a Mortgage Broker. They will be able to listen to your circumstances and provide expert advice on which mortgage is going to be the right fit for you.

What documents do you need if one applicant is Self-Employed for a joint mortgage?

You will need to provide additional documents as an applicant who is Self-Employed depending upon what category you fall into. 

Sole Trader

You should have an accountant to help you declare your income through a self-assessment form. This will entail your tax being calculated by HMRC which you will then pay and receive a Tax Year Overview as proof of the tax you have paid. You will need to provide these documents as well as your Tax Calculations (SA302) forms.

Partnership

If you work in a partnership then you will need to provide your share of the net profits. You need to try and provide at least three years of accounts to your chosen lender.

Limited Company

Lenders will want the director’s salary and any dividend payments; if you have retained profits, you may need a specialist lender if you want these to be included in calculations for your mortgage.

Does a mortgage have to be in joint names?

There are many different mortgage products out there so you do not have to go into a mortgage with another person. If you are struggling to afford a mortgage alone there are a number of mortgage schemes to help you into the mortgage market.

If you need to get out of a mortgage agreement you need to seek expert advice. There is a way to get out of a joint mortgage, for example you can buy out the other partner or sell the house and split the profits. It is best to seek advice from an expert as soon as possible if this applies to you.

How can a Mortgage Broker at Blue Pepper Mortgages help me?

Here at Blue Pepper Mortgages, we have access to the independent mortgage market meaning we can access lending options that are not offered by high street mortgage lenders. Mortgages are a huge responsibility, and we can offer expert mortgage advice and help to guide you to the right option for you.

Get in touch with one of our expert Mortgage Brokers today for tailored advice and assistance with your mortgage application.