What Going Self-Employed Means for Your Mortgage
WRITTEN BY: SAM FOX, UK MORTGAGE CENTRE
Regardless of whether you’re a freelancer or run your own business, there’s a wide range of mortgages for self-employed people available in the UK.
Here at UKMC, we help self-employed clients every day. So if you're wondering how going self-employed affects your mortgage options, you're in the right place.
Can you get a mortgage if you're self-employed?
Yes, absolutely. Being self-employed won’t stop you from getting a mortgage. But you may find the process slightly more detailed than if you were employed.
This is because your income may vary month to month, and lenders want to be sure you can afford the repayments both now and in the long term. That’s why self-employed mortgages usually come with a few extra checks and requirements.
What counts as self-employed?
You’re typically classed as self-employed if you run your own business, work as a sole trader or contractor, or own more than 20-25% of a company.
This includes:
• Freelancers
• Limited company directors
• Business partners
• Contractors and consultants
And yes, EVEN IF you get a payslip from your own limited company that you’re the main shareholder of – You’ll be classed as Self-Employed!
Obtaining a mortgage when you’re self-employed is too difficult; you just need to ensure you’re fully prepared for what could be asked.
What do I need for a self-employed mortgage?
When applying for a mortgage or a remortgage as a self-employed person, lenders will typically want to see a little more in terms of document form you – this is just their process to verify the information we tell them which can include:
1. Two years’ worth of company accounts or tax returns
Most lenders prefer to see at least two years of consistent income, although some will accept just one year with the right supporting documents – AND if the timing is right, one or two may even consider 12 months’ trading history for new Limited Companies!
2. HMRC Tax Calculations & Overviews
These show how much income you’ve declared to HMRC each year and the tax you’ve paid.
3. Business accounts
Ideally, prepared by a qualified accountant. Lenders will want to see them in the finalised position, without the big ‘DRAFT’ words overlayed.
4. Bank statements
Both business and personal accounts may be requested, and for up to 6-months worth.
5. A good credit history
A clean credit record can make a big difference.
6. Proof of deposit (if purchasing a home)
The more you can put down, the stronger your application is likely to be.
Can I remortgage if I’m self-employed?
Yes, and in many cases, it’s easier than applying for a brand-new mortgage.
If you already have a mortgage and want to switch to a better deal, remortgaging as a self-employed person is usually straightforward, especially if you’ve kept up with repayments and your income is steady.
If you’re sticking with your current lender (product transfer), it usually involves fewer checks and can be completed faster.
If you’re switching to a new lender, you’ll go through a full affordability assessment, similar to the original mortgage process.
So if you’re thinking about moving from employed to self-employed, AND you don’t want to move – you’ll be fine to consider making the jump!
Tips to boost your chances of approval
• Keep your accounts up to date and accurate
• Work with a qualified accountant
• Maintain a good credit score by staying on top of bills and debts
• Save for a larger deposit if you can
• Keep personal and business finances clearly separated
What does being newly self employed mean for getting a mortgage or remortgage?
If you’ve recently become self-employed, getting a mortgage or remortgage can be a bit more challenging, but it's still possible. Lenders typically prefer at least two years of income history, but some will accept just one year of accounts or tax returns, especially if your business is stable.
If you’re purchasing a home, some lenders may consider your previous employment or provide products designed for newly self-employed individuals. If you're remortgaging, the process can be more complicated, but sticking with your current lender might make things easier.
Tips for Newly Self-Employed Applicants:
• Keep your financial documents up to date (tax returns, business accounts).
• Save for a larger deposit (if purchasing)
• Work with an accountant to ensure accurate financial records.
• Speak to a whole-of-market broker to find the most suitable deal. Save time stressing over your mortgage with UKMC At UKMC, we specialise in helping self-employed clients find mortgage solutions that work for their unique situations.
If your current deal is ending soon or you need guidance, our expert team is here to help. We’ll work with you to identify the most suitable mortgage options with a quick, hassle-free process.
To get started, complete our online contact form or book your own appointment.
UK Mortgage Centre Limited is an Appointed Representative of Refresh Mortgage Network Limited. Refresh Mortgage Network Limited is authorised and regulated by the Financial Conduct Authority. We are entered on the Financial Services Register under firm number 1019794. As a mortgage is secured against your home, it could be repossessed if you do not keep up the mortgage repayments. The Financial Conduct Authority does not regulate some forms of buy-to-let mortgages. The Financial Conduct Authority does not regulate will writing and taxation and trust advice. You may be charged a fee for your advice. A typical fee is £495, which would be payable when you receive your mortgage offer. Your dedicated advisor will discuss this further on your free initial phone call. Registered company number: 15825320
ABOUT THE AUTHOR
Sam Fox is a mortgage WIZARD. After just 18 months in business, Lea found her dream house, but had been told by another mortgage advisor that there was “no way” she would get a mortgage. Step in Sam… and 6 months later she was the proud owner of a dream house. He’s since helped her with a remortgage, and has been her number 1 referral for anyone looking to get or renew their mortgage. Outside mortgage magic and entrepreneurship, he’s a loving father, marathon runner, and charity fundraiser. Basically, an all-round wonderful human.
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