top of page

Applying for a mortgage self-employed

Writer's picture: Twin Pine MortgagesTwin Pine Mortgages

Updated: May 31, 2023

‘Content correct at time of publishing and subject to change’


Sadly, a self employed mortgage is not as straightforward as it may sound. Securing finance as a self-employed person can be very challenging. No matter your income, self-employed borrowers generally find it harder to secure finance in the UK, especially.

It is worth keeping in mind that if you’re looking for an interest-only mortgage or you have a higher loan to value mortgage, this could cause complications and delay the process even further.


What is a self-employed mortgage?


‘Self-employed mortgages’ aren’t actually separate mortgage products that are only available to self-employed individuals. Additionally, self-employed borrowers are also not excluded from accessing mainstream mortgage products.


On the other hand, it is usually much harder for self-employed people to secure a mortgage. This is usually due to the way in which self-employed individuals’ affordability is assessed. For PAYE employees, it’s much easier to calculate your mortgage affordability, usually from payslips that indicate your annual salary.


Whereas, for self-employed individuals, this is not as straightforward. This is usually because you’re unlikely to receive a monthly salary, rather your income comes from dividends or director’s loans. On top of this, your earnings are likely to fluctuate year on year, so establishing an annual salary can be hard for lenders.


Things to keep in mind


Overall, lenders may struggle to work out how much you can borrow based on how much you earn and how much it fluctuates. Due to the instability of income, lenders will find there is much more risk on their behalf. Keep in mind that if you’re a sole trader with several years of accounts, you shouldn’t struggle too much to attain your mortgage. But if you’re self-employed through a limited company and drawing in income in a more unconventional way, you can assume that you will have some trouble completing your mortgage application.


If you’re self-employed and looking for a mortgage, you should make sure to use a highly respected broker to deal with this process on your behalf. An experienced broker will know the usual obstacles to overcome during the mortgage application process and will thus be able to hopefully foresee these issues and halt any delays. Your advisor will also have a strong relationship with many lenders and an accepted application is much more likely coming for someone the lender already trusts.


If you’re self-employed and looking for a mortgage, don’t hesitate to get in touch with Twin Pine today.

Recent Posts

See All

Comments


Your home may be repossessed if you do not keep up repayments on your mortgage or other loans secured on it.

Most Buy-to-Let Mortgages are not regulated by the Financial Conduct Authority.

For our mortgage advice services, we will charge a fee of between £0 and £500. The fee is based on your personal circumstances and aims. This will be discussed and agreed during your meeting. This fee will cover Data and Document Assessment, Market and Product Research, Lender Affordability Assessments, Recommendation and Presentation of Mortgage Advice, Arrangement of Agreement in Principle, submitting and managing your Mortgage Application with the lender. In addition to this We will also be paid a procuration fee from the lender. The amount of the procuration fee will be disclosed to you.

Twin Pine Mortgages Ltd is an Appointed Representative of PRIMIS Mortgage Network, a trading name of Advanced Mortgage Funding Limited. Advanced Mortgage Funding Limited is authorised and regulated by the Financial Conduct Authority.

Twin Pine Mortgages Ltd is registered in England and Wales at Cash's Business Centre, 1st Floor, 228 Widdrington Road, Coventry, CV1 4PB, company number 13068083. Trading address: 24 Shorncliffe Road, Coventry, CV6 1GS

9_edited.png
© All rights reserved Twin Pine Mortgages Limited 2021 - 2025
bottom of page