Mortgages for the Self-employed
Apart from a brief few years prior to the 2008 financial crisis, when the self-employed could pay a higher interest rate and ‘Self Certify’ their earnings, there has always been a basic unfairness in the UK’s self-employed mortgage approval procedures.
For the vast majority of lenders, the self-employed have to show 3 years of profitable accounts to get a mortgage. But, if you’re an ordinary employee on PAYE, you only need your previous 3 months wage slips. How unfair is that?
And there’s also the discrepancy where self-employed earnings equate to net profits, i.e. after tax and national insurance have been deducted, whereas gross salary before tax is taken as the earnings of employees on PAYE.
This effectively means that the self-employed have to earn 25% more than someone in a normal PAYE job to get the same mortgage.
How do I get you a self-employed mortgage?
Firstly, you should know that I am not a mortgage broker. I am in touch with a small group of mortgage brokers who are sympathetic to self-employed mortgage applications and who are in regular contact with financial institutions who are more willing to lend to the self-employed.
But, it’s not ‘self-certification’ and you will need to have a good, or very good credit rating and have all your paperwork in order. It’s extremely important that all your information and paperwork is properly ‘aligned’. As part of my service, I will:-
- oversee your credit rating and construct correspondence to remove ‘defaults’ and ‘anomalies’ from your credit file.
- collate your bank statements, wage slips, proof of deposit and tax status info to ensure that it is all in full agreement.
- help prepare you for your meetings with mortgage brokers and lenders.
- liaise with your mortgage broker on your behalf, ensuring that all the information your lender needs is in place.