Self Employed Mortgages
It is estimated that 1 in 5 people in the UK are now working on a self employed or daily rate contractor basis, and they can sometimes find it difficult to secure a mortgage with a mainstream bank who often require three years accounts to support an application, and if this is combined with an imperfect credit record, then this will normally result in a mortgage application being declined.
At Selective Mortgages we have access to lenders who offer mortgages for self-employed applicants and daily rate contractors who can evidence their income via a daily rate contract, even where adverse credit has been registered, such as defaults, CCJ’s or mortgage arrears.
Please see below for a brief overview for the proof of income requirements for self employed and contractor applicants.
Self Employed
You may operate as a sole trader or have set up a limited company, either way we have access to lenders who can accept as little as one year’s trading figures, and starting with a 10% deposit requirement, even with an adverse credit history.
For Sole Traders, lenders will want to evidence your income via your latest SA302 Tax Return, but for people who operate a limited company, some lenders can accept the business net profit plus your Director’s PAYE as your assessable income, where this figure is higher than the PAYE and dividends paid to the director by the limited company.
Contractors
If your income is derived through a daily rate contract, we have access to lenders who will assess your income on the basis of the daily rate of pay multiplied by between 46 and 48 weeks to annualise your assessable income, so there will be no requirement to provide accounts or tax returns.
Lenders will normally request a copy of your current contract, and would usually want to evidence your contract has at least three months remaining, but we will confirm the specific requirements to you prior to submitting a mortgage application.
The mortgage rates available to self employed and contractor applicants are the same as those offered to PAYE employed applicants, so as long as you can provide proof of income in the form of a SA302’s or your daily rate contract, then we will be able to assist you with securing a mortgage approval.
If you are self employed or a daily rate contractor and looking for a mortgage, or you just require some information at this stage, please get in touch by calling 0800 0157776 or complete our Online Enquiry Form.