Being self-employed doesn't automatically make getting a mortgage difficult. But lenders can assess your income differently, depending on how you earn and how your business is structured.
Whether you're a sole trader, company director, contractor or business owner, we'll help you understand how lenders may view your circumstances and which mortgage options could be worth considering.
Tell us a little about how you're self-employed and what you're looking to achieve.
The important thing is how a lender assesses the income your business generates and how that fits with your overall financial circumstances.
A sole trader, company director and contractor may all have different ways of presenting their income. Lenders can take different approaches when deciding which figures to use.
Lenders may look at your trading history, accounts, tax calculations, salary and dividends, depending on how you operate. The figures on your paperwork can therefore make a real difference to how your application is assessed.
Not every lender assesses self-employed income in exactly the same way. Understanding those differences can help identify lenders whose criteria are more appropriate for your circumstances.
Self-employed applicants don't all fit the same lending model. Lenders may consider different aspects of your income depending on whether you trade as a sole trader, operate through a limited company or work as a contractor.
If you're a sole trader, lenders will typically look at the income your business generates rather than simply the amount of money passing through the business.
They may consider your taxable profit and trading history, with the exact approach depending on the lender's criteria.
If you're a limited company director, the way your income is assessed can vary considerably between lenders.
Depending on the circumstances, a lender may consider salary, dividends and other company figures when assessing affordability.
Contractors can have different income patterns from traditional employees, particularly where earnings are based on daily or hourly rates.
Some lenders may take a different approach to assessing contract income, depending on the length and nature of the contract and your wider circumstances.
If you own a business or have more complex income arrangements, understanding how your finances are structured can be particularly important when assessing mortgage affordability.
We'll look at the wider picture rather than relying on a single figure in isolation.
Self-employed mortgage applications can involve more financial information than a straightforward employed application. Having the right documents ready can help give a clear picture of your income and business.
The exact information required varies between lenders and depends on how you're self-employed. We can explain what may be needed before you start the application process.
Discuss My CircumstancesYour tax calculations and supporting tax documents may be used to evidence your income.
Depending on your circumstances, recent business accounts may help a lender understand your trading history.
Personal or business bank statements may be requested to help verify income and understand your financial position.
Information about how long you've been trading, your business structure and your current income may also be relevant.
Self-employed applicants can have very different financial circumstances. Whether your business is well established or you've recently changed how you work, the right approach starts with understanding the detail.
If you've recently become self-employed, your trading history may look different from someone who has been running a business for many years. The length of time you've been trading and your previous employment history may both be relevant.
Discuss my circumstancesIf you take a combination of salary and dividends, the way your income is assessed can vary between lenders. Understanding the criteria before applying can be particularly important.
Explore my optionsContract income can work differently from a standard employed salary. Your rate, contract length, working history and the nature of your work may all form part of the assessment.
Discuss my contract incomeBusiness income can naturally fluctuate from year to year. If your income has changed, we'll look at the wider picture and consider how different lenders may view the figures rather than making assumptions.
Talk through my incomeHow much you can borrow depends on more than a single income figure. Lenders will look at your overall financial circumstances and apply their own affordability and lending criteria.
For self-employed applicants, understanding which income figures a lender will use can be particularly important. Two lenders may look at the same business and arrive at different conclusions.
Your existing commitments, deposit, credit history, household circumstances and the mortgage you're looking for can also influence the overall assessment.
Find Out What I Could BorrowHow your income is generated and which figures a lender is prepared to use.
How long you've been trading and the pattern of your earnings over time.
Existing borrowing, regular expenditure and other financial commitments can affect affordability.
The property, deposit, mortgage term and type of borrowing you're considering can all form part of the assessment.
Every self-employed application is different, but these are some of the questions we regularly hear from business owners, directors, contractors and sole traders.
It may be possible. Lenders have different criteria for applicants who have recently become self-employed, so your previous employment, trading history, income and wider circumstances may all be relevant.
Requirements vary between lenders and depend on how you're self-employed. Some may be able to consider applicants with a shorter trading history, while others may require more evidence of established income.
If you're a director of a limited company, lenders may assess your income using salary, dividends and potentially other company figures. The approach varies between lenders, which is why understanding their criteria can be important.
Potentially. How a lender treats an increase in income can depend on how the income has been generated, how long the increase has been maintained and the lender's own criteria.
Not necessarily. The important thing is how your income is structured and how the lender assesses it. Different lenders can take different approaches to company directors, so your circumstances need to be considered individually.
We can look at your circumstances and the reasons behind the previous decision. A decline from one lender doesn't necessarily mean another lender will assess your circumstances in the same way, although every application remains subject to the relevant lender's criteria.
Whether you're a sole trader, company director, contractor or business owner, we'll help you understand how your circumstances may be assessed by different lenders.
Tell us a little about your situation and what you're looking to achieve, and we'll take it from there.
