Mortgages for the Self-Employed: What You Need to Know

13 Jun

Mortgages for the Self-Employed: What You Need to Know

Navigating the mortgage market when you’re self-employed can seem daunting. However, with the right information and preparation, securing a mortgage is absolutely within reach. In this blog, we’ll cover key aspects you need to know about getting a mortgage if you’re self-employed.

Understanding the Basics

Being self-employed doesn’t exclude you from obtaining a mortgage, but it does mean the process might be a bit different compared to someone with a traditional employment setup. Lenders will look at your financial history and stability to assess your ability to repay the loan.

Documentation and Proof of Income

One of the most critical elements for self-employed mortgage applicants is documentation. Here’s what you typically need:

  • Tax Returns: Lenders usually require at least two years of completed self-assessment tax returns (SA302 forms) and corresponding tax year overviews.
  • Business Accounts: Providing full business accounts prepared by a qualified accountant for the same period as your tax returns can strengthen your application.
  • Bank Statements: Both personal and business bank statements can be required to show the flow of money and the health of your business.
  • Proof of Address and Identity: Standard identification documents like a passport or driving licence and utility bills are also necessary.

How Lenders Assess Your Income

Lenders calculate your average annual income based on your tax returns. They may take an average over the last two or three years or use the most recent year’s figures if your income is steady or rising. Consistent or growing income figures are advantageous and demonstrate your business’s stability.

Building a Strong Application

To improve your chances of approval:

  • Maintain Good Credit: Ensure your credit score is strong. Pay bills on time, reduce debt, and check your credit report for errors.
  • Save for a Larger Deposit: A larger deposit reduces the lender’s risk and can make you a more attractive applicant.
  • Reduce Debts: Lenders assess your debt-to-income ratio. Lowering existing debts can improve your application.
  • Get Professional Advice: An accountant can help ensure your financial records are accurate and well-presented.

Choosing the Right Lender

Not all lenders have the same criteria or flexibility when it comes to self-employed applicants. Some specialise in self-employed mortgages and understand the unique financial situations of freelancers, contractors, and business owners. Working with a mortgage broker can help identify these lenders and find the best deals tailored to your circumstances.

The Role of a Mortgage Broker

A mortgage broker can be invaluable for the self-employed. They:

  • Navigate Complex Criteria: Brokers understand the varying criteria of different lenders and can match you with those most likely to approve your application.
  • Provide Market Insight: They have access to a wide range of products and can often find deals that aren’t available directly to consumers.
  • Support Throughout the Process: From application to approval, a broker offers guidance and support, making the process smoother and less stressful.


Securing a mortgage when self-employed requires thorough preparation and understanding of what lenders look for. By organising your financial documents, maintaining a good credit score, and potentially working with a mortgage broker, you can enhance your chances of obtaining a mortgage.

For personalised advice and assistance with your mortgage application, speak to your mortgage broker at Impact Specialist Finance. We’re here to help you achieve your homeownership dreams.