Can I Get a Mortgage If I’m Self-Employed?

Yes, being self-employed does not automatically stop you from getting a mortgage.0 However, the way your income is assessed can be different from someone who is employed.

If you’re self-employed, a lender will usually want to understand how much you earn, how your business has performed and whether your income is likely to continue.

This is one of the reasons speaking to a mortgage broker before you start seriously looking at properties can be helpful. Different lenders have different ways of assessing self-employed income, and finding the right lender for your circumstances can make a big difference.

As a mortgage broker helping clients across Bury, Ramsbottom and Greater Manchester, I regularly help people understand what their options could look like before they make an offer on a property.

How do lenders assess self-employed income?

There isn't one universal approach that every lender uses.

Depending on your circumstances, a lender may look at things such as:

Your annual income

Your trading history

Your latest accounts

Your tax calculations

Your tax year overviews

Your share of business profits

Salary and dividends if you operate through a limited company

Whether your income has increased or decreased

The length of time you have been self-employed

The exact information required will depend on the lender and the type of business you operate.

This is why simply using an online mortgage calculator doesn't always give a reliable indication of what you may actually be able to borrow.

How long do I need to be self-employed before getting a mortgage?

There isn't necessarily a single minimum period that applies to every self-employed applicant.

Some lenders may be comfortable with a relatively short period of self-employment, while others may prefer to see a longer trading history.

For example, if you've only recently become self-employed, there may still be lenders who could consider your application depending on your previous employment history, profession and overall circumstances.

If you've been self-employed for several years, you may have a wider range of options.

The important thing is not to assume that you won't qualify simply because you haven't been self-employed for a particular number of years.

What if my income has increased?

If your business has grown and your income has increased, this can potentially be positive when applying for a mortgage.

However, lenders don't all assess increasing income in exactly the same way.

Some may look at an average of previous years, while others may place more emphasis on your latest figures, depending on their lending criteria.

This can make lender selection particularly important for self-employed applicants.

What if my income has decreased?

A reduction in income doesn't necessarily mean you won't be able to get a mortgage, but it could affect how a lender assesses your affordability.

A lender may want to understand why your income has fallen and whether this is a temporary change or part of a longer-term trend.

This is where providing the right information and choosing an appropriate lender can be particularly important.

What documents will I need?

The documents required will depend on your circumstances and the lender you apply to, but you may be asked for things such as:

Tax calculations

Tax year overviews

Business accounts

Bank statements

Proof of identification

Details of existing financial commitments

Proof of deposit

Information about your business

If you operate through a limited company, the lender may also want information about your salary, dividends and shareholding.

Getting your paperwork together early can help make the mortgage application process much smoother.

What if I run a limited company?

Being a limited company director doesn't automatically mean your mortgage application will be complicated.

However, lenders can assess directors in different ways.

For example, depending on the lender and your circumstances, they may consider salary and dividends, or potentially other aspects of your company income.

This is one of the areas where getting advice before applying can be particularly useful.

A mortgage isn't simply about finding the lender with the lowest rate. You also need to find a lender whose criteria work with the way you earn your income.

Can I get a mortgage if I'm a contractor?

Yes, contractors can potentially get mortgages too.

However, the way your income is assessed can depend on the type of contract you have, how long you've been contracting, your previous experience and the lender's criteria.

Some lenders may be comfortable considering contractor income in ways that others aren't.

If you're a contractor, it's therefore worth getting your circumstances assessed before making an offer on a property.

Does being self-employed affect how much I can borrow?

It can, but there isn't a simple answer.

Your potential borrowing will depend on your income and the lender's affordability assessment, along with other factors such as:

Your deposit

Existing loans and credit commitments

Household income

Your credit history

Your age and proposed mortgage term

Your monthly expenditure

The type of mortgage you're applying for

The lender's criteria

Two people with similar incomes can sometimes receive different borrowing figures from different lenders.

That's why it's important to look at your circumstances as a whole rather than relying on a single online calculator.

Should I speak to a mortgage broker if I'm self-employed?

I'd recommend speaking to a broker before you start making offers on properties, particularly if you're unsure how your income will be assessed.

A broker can look at your circumstances and help identify lenders whose criteria may be suitable.

This can give you a clearer idea of your potential borrowing and help you understand what price range you should realistically be looking at.

It can also reduce the risk of finding your dream home and then discovering that your mortgage application doesn't work in the way you expected.

What if I've been rejected for a mortgage before?

Don't automatically assume that a previous rejection means you can't get a mortgage.

There can be many reasons an application doesn't proceed, including affordability, lender criteria, documentation or the way income has been assessed.

However, it's important not to make multiple applications without understanding the reason for the rejection.

If you've previously had an application declined, it's worth getting advice on your circumstances before applying again.

Self-employed mortgage advice in Bury and Ramsbottom

If you're self-employed and looking to buy a home in Bury, Ramsbottom or the surrounding Greater Manchester area, you don't need to work everything out on your own.

Whether you're a sole trader, company director, contractor or have a more unusual income structure, I can help you understand how your circumstances could be viewed by lenders.

The aim isn't simply to find out how much you could borrow.

It's about understanding what mortgage options may be available and making sure the mortgage you're considering is affordable for you.

I offer appointments either face-to-face or by video call, depending on what suits you.

Speak to Ben before you start house hunting

If you're self-employed and thinking about buying a home, getting mortgage advice early can give you much greater confidence when you start looking at properties.

I'll take the time to understand your circumstances, explain your options clearly and help you work out what your next steps could be.

If you're thinking about buying a home, get in touch for a friendly, no-obligation conversation about your circumstances.

Frequently Asked Questions

Can I get a mortgage if I've only been self-employed for one year?

Potentially, yes. Some lenders may consider applicants with a relatively short period of self-employment, depending on their circumstances and lending criteria.

Do mortgage lenders need three years of accounts?

Not necessarily. Lender requirements vary, and some may consider applicants with less than three years of trading history.

Can I get a mortgage as a limited company director?

Yes. Limited company directors can get mortgages, although lenders may assess income differently depending on how the business is structured and how you pay yourself.

Can I get a mortgage if my income changes every year?

Potentially. Lenders may look at your previous income and business performance when assessing affordability. The way variable income is treated depends on the lender.

Should I speak to a mortgage broker before finding a house?

Yes. Speaking to a broker early can help you understand your potential borrowing and identify any issues before you start making offers.

Can I get a mortgage if I'm a contractor?

Potentially, yes. Contractor applications can be assessed in different ways depending on the type and length of your contract and the lender's criteria.

Important: Your home may be repossessed if you do not keep up repayments on your mortgage.

The information in this article is for general guidance only and does not constitute personal mortgage advice. Mortgage lending criteria can change and will depend on the individual lender and your circumstances.