Top tips for securing a self-employed mortgage

Are you self-employed? Do you want to get on the housing ladder? Read this article for some top tips for securing a self-employed mortgage.

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

a couple embrace in front of their new home

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Employees are treated as a safer bet by lenders, but this doesn’t mean you can’t get a mortgage if you are self-employed. According to the experts at business financial platform Tide, here are the top tips for securing a self-employed mortgage.

1. Get your accounts in order

A lender will want evidence that you have your business finances under control. They will also want proof of a steady income.

According to Oliver Prill, Tide CEO, the majority of lenders will want to see at least 2 to 3 years of certified accounts. These are accounts that have been prepared by a qualified chartered accountant.

2. Maintain a good credit score

As part of your mortgage application, the lender will check your credit score. The higher your score, the greater the chance your application will be accepted. It’s therefore important to maintain a good credit score before applying for a self-employed mortgage.

If you are uncertain about your credit score, you can check with the three credit reference agencies for free. They are Experian, Equifax and TransUnion.

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3. Stay on budget

As part of your application, lenders will undertake what is known as an affordability assessment. This is an examination of your household finances to make sure you can afford to take on a mortgage.

In the months before your application, stick to your budget. Keep your expenditure to a minimum and don’t make any big purchases such as a luxury holiday.

4. Be realistic

Let’s face it, not everyone that wants to become a homeowner is in a position to buy a home. With this in mind, it’s a good idea to take a critical look at your financial situation before applying for a self-employed mortgage.

If you are struggling to make ends meet, it’s highly unlikely that your application will be successful. If this happens, it could negatively affect your credit score and you will need to wait before making another application.

Look at your finances with a critical eye. For further information, check out our article on the seven things that could stop you from getting a mortgage.

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5. Consider saving for a bigger deposit

While it’s now possible to get a mortgage with a 5% deposit, that may not be the case if you are self-employed. Unfortunately, lenders will often insist that you have a deposit of at least 20% when applying for a self-employed mortgage.

Generally, when it comes to deposits, the larger the better. It’s worth waiting a while until you have a bigger deposit before submitting an application.

6. Get professional advice

A mortgage broker will give you professional advice on what type of mortgage would suit you. They will search the market for the best deal and help you with your application.

If you are applying for a self-employed mortgage, it is worth consulting a mortgage broker who can guide you through the application. For further information, check out our article on how to choose a mortgage broker.

Further information

If you have never had a mortgage before, it’s a good idea to undertake some research before seeking professional advice. Further information is available in our Complete Guide to Mortgages.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be considered so you should consider taking independent financial advice.

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