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If you're self-employed and looking to buy a property in the UK, you may be wondering how to go about getting a mortgage. In the past, self-employed people may have found it difficult to get a mortgage but in recent years lenders have become more accommodating and there are now many options available. In this blog, we'll take a closer look at self-employed mortgages in the UK and what you need to know before applying.
How Do Self-Employed Mortgages Work?
Self-employed mortgage work in much the same way as traditional mortgages. The main difference is that lenders will usually look at your income from self-employment over over the past few years, rather than your salary. This means that you'll need to provide additional documentation, such as your tax returns or business accounts, to prove your income.
When applying for a self-employed mortgage, lenders will typically look at your average income over the past few years. They may also take into account any fluctuations in your income or any changes in your business that could affect your ability to repay the mortgage.
Things to consider before applying for a mortgage when self-employed:
Income: When applying for a mortgage as self-employed, it's important to have a clear understanding of your income. You'll need to provide evidence of your income, such as tax returns or business accounts and be prepared to explain fluctuations or changes in your income.
Deposit: Like traditional mortgages, self-employed applicants require a deposit. The amount you'll need will depend on the lender and the value of the property you're looking to buy.
Affordability: Before applying, it's important to carefully consider your affordability. Take into account your income, expenses and other financial commitments to ensure that you'll be able to afford the mortgage repayments.
In conclusion, before applying for a mortgage it's important to have a clear understanding of your income, deposit requirements, interest rates and affordability. With preparation and talking with one of our Advisers we can help you succeed in your home ownership goals.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE
Approved by The Openwork Partnership on 18/04/2023