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Residential Mortgages > Self Employed Mortgages

If you are self-employed, a company director or unable to prove your income, it can be difficult finding a suitable mortgage. There are a number of reasons why it is often more difficult for those in such situations, the main ones are that the income of the person tends to fluctuate, and they are unable to prove their income like those regularly employed who can produce payslips.

For a self-employed mortgage, many lenders require between one to three years of audited accounts supplied by a chartered accountant in order to prove your income, if you are able to do so then you will have a range of options available to you and should have little difficulty in arranging your mortgage. The accounts allow the lender to see your earning potential and show that you have a good financial history, and allow them to assess what amount of mortgage you could afford.

Not everyone can produce the necessary accounts, often because they don’t have sufficient financial history. In these cases the only option is to self-cert, this simply involves the borrower declaring to the lender their yearly earnings in writing. The self-certification process requires the borrower to be honest when certifying their earnings, and involves a legal statement to ensure the lender is covered and that the borrower is truthful.

With the self-cert mortgage, the lender uses the declared earnings to determine if the person is eligible for a mortgage, and to calculate how much of a mortgage they will be allowed. This form of mortgage will generally carry slightly higher rate of interest when compared to standard mainstream versions and they will generally require a greater deposit amount as well.

As with any form of mortgage or loan, it is important that you are realistic in the repayments that you will be faced with, while having a shorter repayment period will save you money in interest rates this will mean a larger monthly cost, whereas a longer repayment period will see the monthly cost lessened. Striking the balance between paying off your mortgage quickly and keeping the repayments at an amount that you can financially cope with is important, and is something that our mortgage experts will help you with.

Self-employed mortgages do carry a premium over their standard counterparts, however this premium is usually quite low, so overall the mortgage will not cost you a great deal more. The main area where these types of mortgage can seem more expensive is in the level of deposit required, as this will be a higher percentage. It's worth noting that while this may mean a higher initial outlay, it doesn't actually make the mortgage more expensive, as you would have to repay the difference anyway with a mortgage with a lower deposit amount.

Being self-employed, and not having a regular or provable income needn’t prevent you from getting the mortgage that you need, there are specialist lenders in the market who offer mortgages for these circumstances, and we at Loans UK can find you the very best available.