If you are self-employed and looking to make your first move onto the property ladder then you might be concerned that you won’t be able to get a good deal on a mortgage.
Whilst it is true that with the removal of self-certification mortgages from the market, due to the number of people who abused the financial system, getting a mortgage as a self-employed person may be a little trickier, it is certainly not impossible. And, there are plenty of options out there.
What do you need?
The key point to remember as a self-employed person looking to take out a mortgage is that you will need to be able to prove to your income levels to any potential mortgage lender. The majority of lenders will want to see a minimum of two years’ worth of accounts or tax returns. This is in order to see that the amount you are claiming to earn is accurate. However, the more evidence you can provide to prove that you are a good candidate for a mortgage the better. In reality you will need:
- A minimum of 2 years worth of accounts
- An accountant
- A proven track record of regular scheduled work
- A good deposit
- A very good credit history
Any lender will want to take a look at as much information as possible in order to offer you the best mortgage product they can. For this reason, it can be a good investment to have an accountant prepare your accounts rather than doing it yourself. Your accountant will be able to ensure that your accounts are fully up to date before you approach a mortgage lender. Lenders are not impressed when the accounts you offer them are not updated. This might mean that you are hiding something such as a decrease in income.
Essentially, it is really important to ensure that everything is as up to date as possible. And you should be able to offer your potential lender all the information they need. Check your credit rating before you talk to a lender. If it could be better, then take steps to improve it. The more financially stable you are, the better your chances of getting a good rate on a mortgage.
Look for a mortgage broker
A mortgage lender will only be able to offer you their products, and this might mean that you are not always accessing the best rates. A mortgage broker, on the other hand, will have access to mortgage products from a number of different companies. They will be able to shop around in order to find the best deal for you. Whilst this might mean paying out a little in fees to the broker, in the long run getting a better deal on your mortgage could put you in a much better position financially. So, it is money well spent.
Don’t assume that because you are self-employed you won’t be able to get a good deal on a mortgage. This is simply not true. With a little work, preparation and dedication a good mortgage is achievable – even when you are self-employed.