Are you self employed and struggling to get a Mortgage. In this article we will breakdown some of our recent FAQ’s
It is fair to say most mortgage lenders will lend to the self employed applicants that have been trading for at least a three years with accounts showing an incline of profits over the period. If you do not conform to this scenario obtaining a mortgage can be tough. At Niche Advice we specialist in helping self employed applicants get a mortgage. Below is a list of just some of the instances in which we can help.
- Umbrella Companies
- Taking over the family business
- One years trading
- New partner in a professional practice
- Use of underlying net profit in a Limited Company
- IT Consultants
- Accountants Certificate rather than SA302s
- Declining net profits
I Am Self Employed Contractor Can I Get A Mortgage?
It is not uncommon for a company to supply a contract to another for a period. It is then down to the end company to operate on a self employed basis. Generally lender’s do not like this as they would see too great a dependency on the Umbrella Company’s contract and would doubt income stability if it were to cease. We can however help provide mortgage finance for this self employed basis.
I Have Recently Taken Over The Family Business Can I Get A Mortgage?
The calibre and track record of the existing business would need to be demonstrated. If you have been active in the business as an employee this would improve your chances of a successful mortgage application.
I Have Been Self Employed For 1 Year Can I Get A Mortgage?
We can arrange mortgages for a business that has a 12 month track record, the accounts will need to have been finalised though. The business will need to be showing a profit which can be hard in the first year. If you have an Accountant you chances of success are increased as they can provide a professional opinion on the expectation for future profit.
I’m A New Partner In A Professional Practice Can I Get A Mortgage?
Yes, this would be reserved for professionally qualified occupations such as solicitors, accountants, dentists, vets, medical doctors, barristers, actuaries, optometrists, pharmacists etc. This may also include trainees in these fields.
I’m A Director Of A Limited Company Is There A Mortgage Lender That Looks AT Retained Profit In My Business When Assessing Affordability?
Most lenders will take salary plus dividends when determining affordability for a mortgage, however we have access to lenders that appreciate how companies operate and why you might want to retain money in your business for working capital rather than draw it all down. By using this method of calculation you may be able to borrow considerable more than the norm.
I Have A Franchised Business Can I Get A Mortgage?
Absolutely, if the business is trading well you should have the pick of most mortgage. To find the best one you should consider talking to an Independent Mortgage Broker, such as Niche Advice.
I Am An IT Consultant Can I Get A Mortgage Based On My Contract Rates?
Yes, there are lenders that will look at your remuneration and apply the same rules as they would for an employed person.
My Self Assessment SA302s Do Not Reflect My True Income Is There A Mortgage Lender That Will Work Off An Accountant’s Reference?
It is possible but you need specialist mortgage advice if this is the case. I suggest you call a Mortgage Broker, such as Niche Advice, to talk this through.
My Accounts Show A Drop In Net Profits Can I Get A Mortgage?
As a general rule lenders do not like a decline in net profit. They will need to be convinced that the trend is reversing and will base affordability on the last year’s filed accounts rather than an average.
For more information on self employed mortgages please contact us on T: 020 7993 2044 or alternatively complete the simple enquiry form on the top right hand side of this page.
Payam Azadi is a partner at Niche Advice Ltd who are Independent Financial and Mortgage Advisers in London.
Author: Payam Azadi
Payam Azadi is a partner at Niche Advice who are whole of the market Independent Mortgage Brokers. His role is very much focused on Property financing both on residential and commercial lines.