The thing about mortgages for the self-employed.
The prospect of home ownership is a dream shared by many. However, people who are self – employed can at times face an uphill struggle to fulfil their ambition and successfully make it onto the property ladder.
Proof of Income
The good news is, theoretically, the employed and self – employed often have the same if not similar choice of mortgage products.
In reality, like most forms of lending, decisions made by mortgage lenders are determined by; credit scores, affordability and proof of income.
Bank account and financial statements reflect nuances in business performance. No two days, weeks, months or years are the same. Where it is possible to experience a period high growth in one year, preceded by a period of stagnation or even losses and consequential instability in business and personal finances, demonstrating regular and consistent levels of income can be particularly challenging.
Personal and business bank statements, dividend vouchers, three years certified accounts, most recent tax return, an accountants’ reference and SA302 form (providing a brief summary of income reported to HMRC upon completion of a tax return) are all acceptable ways of proving income. Each mortgage lender will specify preferences for supporting documentation.
Making the right choice
Unlike other types of investment, self – employed mortgage borrowers may find a wider variety of products available. Including those that specialise in mortgages purely for the self – employed. Seeking credible advice to help alleviate some of the confusion in identifying suitable lenders, offering products compatible with your unique circumstances, can save time and money.
The Financial Conduct Authority regulates mortgage lenders, mortgage advice and related activities, in order to maintain standards and protect the rights of mortgage borrowers.
Newable Commercial Finance have an award winning team of highly qualified and experienced FCA approved funding specialists. If you are self – employed and a first time buyer, looking to re-mortgage and/ or looking buys second home, contact us today.