As a mortgage broker in Doncaster, we know that a lot of self employed applicants can find the process of obtaining a mortgage to be quite difficult. Whether it’s trying to match up with lender’s criteria, or not being able to prove your income, we know that self-employed applicants have it a lot harder than regular employed applicants.
Whilst it would be nice if everyone on their mortgage journey could be treated the same way, there are understandable reasons as to why they make it so difficult. The lender needs complete confidence that as a self-employed applicant, you can definitely afford the monthly mortgage payments. The factors they will look at include:
Our mortgage advisors in Doncaster will always be on hand to help you secure a mortgage product that is appropriate for you as a self-employed applicant.
We will provide you with clear & simple guidance throughout the whole mortgage process, giving you fast & friendly mortgage advice, whilst supporting your application by referencing your income and years of accounts’.
As a self employed mortgage broker in Doncaster, we have the ability to search through 1000s of competitive mortgage products specifically tailored to self-employed applicants. Once we find the deal that is right for you and you are okay with going forward, we can get started with preparing your application for a mortgage.
Our advisors work every day of the week, from morning until night, so that our customers have the option of an appointment at a time that suits them best. Get yourself booked in for a free mortgage appointment and we will see how we are able to help you.
The number of years of financial records that a self-employed individual needs to qualify for a mortgage can vary depending on the lender and the specific mortgage product. However, most lenders typically require at least two to three years of financial accounts or tax returns to assess your income stability and affordability. These documents should demonstrate your income over a consistent period and provide a reliable picture of your earning capacity. Some lenders may offer mortgage options to those with only one year of accounts, but these are often limited, and you may face more stringent requirements, such as a higher deposit or interest rate.
Lenders assess the income of self-employed applicants differently than they do for salaried individuals. They typically evaluate your income using the following methods:
Trading Profits: For sole traders and self-employed individuals, lenders often base their assessment on your trading profits as reported on your tax returns. They may average your income over the past two to three years to determine your average annual earnings.
Salary and Dividends: If you're a director of your own Limited Company, lenders may consider both your salary and any dividends you receive. They often examine your personal and business tax returns to calculate your total income.
Recent Performance: Some lenders may give more weight to your most recent financial performance, especially if your income has been increasing steadily. They may use your most recent year's figures as the basis for their assessment.
Accountant's Reference: Lenders may request an accountant's reference or a certified set of accounts to verify your income.
It's crucial to note that different lenders have varying criteria and policies for assessing self-employed income, so it's wise to consult with a mortgage advisor who are experts in self-employed applicants to find the lender and mortgage product that best suits your financial situation.
Getting a mortgage as a director of your own Limited Company is possible but may require additional documentation and a tailored approach. Here are some steps to consider:
Prepare Financial Records: Ensure that your company's financial records are in order, including annual accounts and tax returns. Lenders will want to see evidence of your income.
Choose the Right Lender: Work with a mortgage advisor who has experience with self-employed individuals and Limited Company directors. They can help you find lenders that specialise in these types of mortgages.
Provide Proof of Income: Be prepared to provide evidence of your personal income from the company, including salary and dividends. This may involve sharing your personal tax returns and company accounts.
Deposit and Credit Score: Your deposit and credit score will still play a significant role in mortgage approval, so make sure your financial affairs are in order in these areas.
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both Jason and Molly have been extremely professional and efficient in the complexities of mortgage application allowing the application to go through within a week from contact. Excellent work.
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During this free appointment, your mortgage advisor in Doncaster will look at your tax year overview and tax calculations to work out your maximum affordability.
Our team will look through 1000s of mortgage products to find the best deal for your circumstances and supply you with an AIP.
Once your purchase offer has been accepted, your mortgage advisor in Doncaster will submit your full mortgage application and evidential documents to your lender.
Our service won't just stop here. We will not only secure you the best mortgage deal, we will also recommend relevant insurance to protect you.
We regularly converse with customers who have perhaps encountered difficulty in approaching their bank directly for a mortgage. A couple of the reasons that we have heard for this happening have included;
Definitely make sure that you don’t go about approaching various different lenders by yourself, especially if you’re unsure of what their lending criteria is. Doing so can cause more harm than good when it comes to your credit score and may even stop you getting a mortgage full stop.
We work quite often with different self-employed mortgage customers, all of whom require some fast & friendly mortgage advice in Doncaster.
Below we have put together a small selection of scenarios that we have encountered throughout our time as a trusted mortgage broker in Doncaster, when speaking to self-employed mortgage applicants:
Generally speaking, banks are not always great options to take if you are a self-employed mortgage applicant. These banks have automated systems and sadly, regardless of how long you’ve been banking with them or the amount of money you often pay into your account, if they decline you, there’s not a lot you can do about it with them.
This is where a mortgage broker in Doncaster is useful, as our experienced team are able to match up your needs and current financial situation to the different lenders mortgage criteria, hopefully giving you the edge and allowing you to continue with the process.
A lot of the high street mortgage lender that might come to mind will use their in-house credit scoring policies when deciding on who they will allow to take out a mortgage. These credit scoring policies are usually inspired by the mortgage lenders own experience with mortgage applicants over the years.
When they do their checks, they will analyse previous mortgage repayment statistics, any historical repossession data and other common patterns in order to determine common denominators that are deemed high risk. This saves time and money for the lender, but leaves a lot of self-employed mortgage applicants struggling to obtain a mortgage.
In the past, you could probably correctly estimate that mortgage lenders have had a lot more self employed applicants fall end up going into debt than regular employees. On the other side of the coin,those regular applicants probably didn’t have to jump through nearly as many hoops to find mortgage success.
If you’ve been researching by yourself, you’ll likely know that lots of high street lenders have very strict lending criteria, with a lot of the lenders out there wanting to see your profits increasing three years accounts minimum, with some working off a three year average.
Whilst not all mortgage lenders work by these rules (with some only requiring one years of accounts), you should always make sure you have a couple of years to work with, as this will give you a boost in possibly obtaining a mortgage.
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Doncastermoneyman.com & Doncastermoneyman are trading styles of UK Moneyman Limited, which is authorised and regulated by the Financial Conduct Authority.
UK Moneyman Limited is Registered in England, No. 6789312 | Registered Address: 10 Consort Court, Hull, HU9 1PU.
Authorised and Regulated by the Financial Conduct Authority.
We are entered on the Financial Services Register No. 627742 at www.register.fca.org.uk
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Doncastermoneyman.com & Doncastermoneyman are trading styles of UK Moneyman Limited, which is authorised and regulated by the Financial Conduct Authority.
UK Moneyman Limited is Registered in England, No. 6789312 | Registered Address: 10 Consort Court, Hull, HU9 1PU.
Authorised and Regulated by the Financial Conduct Authority.
We are entered on the Financial Services Register No. 627742 at www.register.fca.org.uk
