More people are currently self-employed in the UK than ever before, but since the introduction of the Mortgage Market Review (MMR) in April 2014, lenders have concentrated more on 'affordability' putting the onus on the self-employed to prove income.
Self Certification mortgages are long gone, so lenders typically divide the self-employed into the following categories:
So what do you do if you do not have three years accounts? Well the good news is that a small band of lenders have started considering self-employed borrowers with just one years worth of accounts.
Any recent dips in income, lenders will require a satisfactory explanation.
If you are a contractor, most lenders will want to see at least a 24 month history, with at the least a minimum of 6 months remaining on the present contract. Specialist lenders may take a 12 month history.
Be prepared to produce up to 6 months of both Business and personal Bank statements on application, with lenders requiring you to produce the following documentation on application.
The amount you are able to borrow differs from the normal underwriting process, with underwriters using a process that calculates annual gross earnings from a day rate. For example: Your daily rate x 5, x by 46 weeks.
Your home may be repossessed if you do not keep up repayments on your mortgage.
You can choose how we are paid for mortgages. We can accept commission from the lender in which no fee would be payable. However if you want to pay for our services by paying a fee, then a charge of 0.5% of the loan will apply.