There are a lot of benefits of being self-employed and running your own business. However, getting a mortgage isn't always one of them. Lenders like to see documentation that shows a good current income, a long history of steady income and a good indication that the steady income will continue.
This is compounded by the fact that the self-employed tend to 'shelter' their income as much as possible to avoid tax and so lower the income they can show.
Factors Effecting Mortgages for the Self Employed
Lenders will class your application as a self employed application if you are a sole trader, a partner or own more than 20%-25% of the shares of the company you work for.
The following 2 factors will determine whether a lender will consider your application:
How long have you been self-employed - Generally they will require that you are self employed for a minimum period which may be 6, 12 or 24 months.
Can you prove your income - Tthis can be by 2 or 3 years accounts.
If you cannot fit these requirements then it should still be possible to get a mortgage:
Individual Underwriting - A small number of lenders may look at your case on an individual basis. We need to put together a good case including maybe bank statements showing good income streams.
Self Certify Income - One option may be to self certify your income.
Less Than 6mth Trading - Two or three lenders will look at your case even if you have only been trading for less than 6 months. Loan to value may be limited or the interest rate my be higher though.
