Documents for Self Employed Mortgage
We will work with you to understand your situation and needs, then develop personalised advice to help you achieve your goals.
Get in touch
There is no specific mortgage out there for the self-employed people. As someone who is self-employed you can access all of the same mortgage products as a PAYE employee. The difference is in how you have to prove your income.
It can be more of a challenge to obtain a mortgage if you are self-employed due to having to ensure you have a reliable income that can be proven. There are plenty of mortgage lenders out there who are becoming more flexible towards the self-employed.
How can a Mortgage Broker help if you Prepare Documents if you are Self-Employed?
Mortgage brokers know the ever-changing mortgage market and the lenders too. They will be able to point you to the right mortgage product to fit your needs as well as your financial situation. Brokers know just how unique self-employed situations can be and will be able to give you the direction you need.
Brokers also know what documentation is required alongside your mortgage application and can ensure that you are completely prepared when approaching a lender. They will take all the stress and fuss out of mortgages while making sure you understand your commitments every step of the way. Brokers are able to give you the assistance you need.
What Documents will I need?
When you apply for a mortgage you will need to provide the standard things such as:
- Driving License
- Utility bills within the past three months
- Bank statements.
As someone who is self-employed you should also prepare the following:
- In most cases, two or more years of accounts
- Self assessment and tax returns – SA302 forms from the past two to three years
- Evidence of upcoming contracts (if applicable)
- Statements of dividend payments or retained profits (if applicable).
Some mortgage lenders will require for you to prepare your accounts with a qualified accountant as it proves your reliability. Lenders will most likely average out your income over the past few years and focus on that sum.
How Will I be Assessed?
As a self-employed person you will be assessed differently based upon what type of self-employed worker you are.
If you are a sole trader you will need to declare your income through self-assessment forms and your SA302 forms. You may need to do this through an authorised and regulated accountant who is registered in England.
If you are part of a partnership you will need to show your individual share of the profits.
As a Limited Company you will need to provide your salary and any dividends that you have in your company. You will need at least two to three years of accounts or will require a specialist lender.
How do you Improve your Chances of being Approved by a Lender?
To improve your chances of getting a mortgage you should make sure that you have a good credit score. You can check your credit rating for free online on websites such as Check My File. You can ensure you have good credit by keeping up with monthly payments and ensuring you stay out of your overdraft. It is important to close any unused accounts too and register on the Electoral Register to ensure an up-to-date reference is being held.
The bigger the deposit that you can provide the better. If you can give more money up front lenders are likely to give you lower rates on your mortgage. A bigger deposit can save you more money in the long term.
Make sure that you have all your documents prepared and you can afford the mortgage you are applying for. Lenders will require credit checks and too many can damage your score.