We recognise the barriers the self-employed face in obtaining suitable lending products and connect you with specialist mortgage advisors who have knowledge of which banks and building societies are more likely to lend to, and offer competitive interest rates for, you.
The self-employed are underserved
45% of the self-employed can’t provide the right documents for mortgage lenders.* At YellowWork, we are building innovative apps and partnerships to make access to essential lending products easier.
Acquiring a mortgage
Lenders will typically view you as self-employed if you are a sole trader or company director and own more than 20% to 25% of a business from which you earn your main income. You are required to apply for the same mortgages that are available to people in permanent employment, and you’ll need to pass the lender’s affordability tests in the same way as those borrowers. As you do not have a permanent employer to verify your income, you will be required to provide evidence of:
- 2-3 years SA302 forms or a tax year overview from HMRC
- 2+ years’ certified accounts
- Maybe evidence of upcoming contracts
- Maybe evidence of dividend payments or retained profits (if you’re a company director)
Do self-employed people have to pay higher mortgage rates? The mortgage deal that you receive should be the same as someone with a comparable salary in a permanent job.
What will I need to show? Mortgage lenders will request proof of identification and residence, such as a passport and recent utility bills. Lenders may also want a bank statement to view your annual expenditures in order to ascertain whether you can afford your mortgage repayments.
What if I have less than 2 years of accounts? You may find it difficult to convince lenders that you can afford to repay the mortgage, but other evidence of regular work may help. A healthy deposit and good credit history will also boost your chances of securing a mortgage.
What can I do to boost my chance of receiving a mortgage? You can save more for a deposit, ensure your credit rating is high, get on the electoral roll and speak to a BIFS mortgage broker.
YellowWork has partnered with Bexley Independent Financial Advisors, who have a special interest in providing financial advice to the self-employed sector.
*The Mortgage Lender.