Self-Employed and Contractor Mortgages

Technically, we’d say there’s no such thing as a self-employed mortgage, rather there are lenders out there who are more accepting of self-employed applicants and their circumstances.

Best Lenders

It really does vary depending on your circumstances. Factors to be considered include:

  • Are you a sole trader or a limited company?
  • How long have you been trading for?
  • Are you joining an existing company, possibly becoming a partner?
  • Have your profits increased year on year or have they begun to decline?
  • If you’re a limited company do you draw much income or tend to funds as profits in the company?

All of the above and many more factors can affect how a lender will assess you.  This is why we recommend speaking with one of the advisers we work with to ensure you find the best option out there.  

Proving Income

The most commonly accepted form of income proof would be your tax calculations and tax year overviews – documents from HMRC that show all of your declared income.  This can be used if you’re a sole trader or running a limited company.  Lenders may also ask to see company accounts or bank statements too.

If you’re a contractor operating through your own limited company or an umbrella company, there are mortgage providers that will assess you simply on your contract.

Depending on your circumstances, there can be lots of ways to prove your income, but speaking with an adviser will be the best place to start. 

Contractors

Lenders generally want to see a track record of you being successful in your line of work.  Provided you have at least 1 years experience, there will likely be options available to you.  

If you don’t have a long track record yet, lenders will then be more concerned with how long the contract is going to last.  For example, if you have no track record of your line of work, a lender may want to see a contract that lasts as long as 2 years.

Just like mortgages for standard self-employed people, there are lots of variables to consider for finding a mortgage as a contractor. It’s often best to speak with an experienced adviser.  

Self Employed Length

For most lenders you’ll have to be self-employed for 2-3 years, as they’ll want to see a track record of your business running successfully.

However, there are mortgage providers that can consider shorter track records, with as little as one full year’s company accounts.

Additionally, for contractors who invoice through a limited company, there is potential to secure a mortgage within less than 1 year of your company being set up.  

Self-employed scenarios can be complex,  which is why speaking to an experienced adviser is key.  They can find the best option for you and will know exactly how to present your circumstances to the mortgage providers.