3 Tips On Applying For A Mortgage When You Are Self Employed

3 Tips On Applying For A Mortgage When You Are Self Employed

Applying for a mortgage is daunting for anybody, but being self employed often means there will be a few extra hoops to jump through. Today, we’ll outline 3 tips any self employed person needs to hear, with the goal of alleviating some worries and making things just a little bit clearer.

Plan Your Mortgage Application

You’ll hear us talking a lot about planning for a mortgage, but it’s even more important to do so if you are self employed. There are many different types of self employment; you could be a sole trader, director of a limited company, or perhaps you are contracting.

Lenders will have different attitudes towards different situations, so rather than just preparing your tax returns and arriving at an application, make sure you plan each step of the process thoroughly. Start with the end in mind, that way you can plan what your net profit would need to be in order to be able to afford a certain property.

If you have an accountant remember that a good working relationship between your accountant and mortgage adviser is always beneficial as they can help you plan accordingly.

Forget The Myth: You DON’T Need to Have Been Trading For 3 Years

Many self employed people believe that they need several years of trading behind them before they can apply for a mortgage successfully. We’re here to tell you that isn’t the case anymore, and that we can help you after just 12 months.

While it’s true that lenders want to make sure that you have a sustainable income, we can work with references from an accountant and your latest tax return to secure a mortgage. With as little as 12 months trading under your belt, you will be able to achieve a competitive rate on your mortgage without having to settle for undesirable rates or specialist lenders.

If you have been holding off applying for a mortgage because of this myth, don’t worry and give us a call because we can start helping you today.

You DON’T Need to Pay A Large Tax Bill to Get A Mortgage

Another great tip that all self employed people should know is that you do not have to take all the money out of your business to secure a mortgage. For example, if you are a director of a limited company, there are many lenders who will be happy to take a share of your net profit as opposed to just your salary or dividends.

Many business directors will choose to take a lower salary in order to keep their business healthy and thriving. Lenders can take this into account when you are applying for a mortgage so you don’t have to choose between a home or a business.

Home Financial NW Ltd – Here to Help The Self Employed

We hope this article helped you put some worries to rest and potentially even unlocked some doors for you. If you are considering applying for a mortgage, our team of professionals will work with you every step of the way to achieve the most suitable rates available for you and your family.

Remember it’s always best to start discussing a mortgage well ahead of time, so give us a call today on 01925 939170. Whether it’s to book a consultation or to just find out more information, one of our team will be more than happy to help. You can also fill in a quick contact form and we’ll be in touch whenever is best for you.

Risk warnings:

– You may have to pay an early repayment charge to your existing lender if you remortgage early.

– Your home may be repossessed if you do not keep up the repayments on your mortgage.