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Self Employed Mortgages

One of the misconceptions about the mortgage market is that it is now very difficult for self employed people to get a self employed mortgage loan in order to buy a home. It’s certainly true that one type of mortgage used by the self employed in the past (self certification mortgage) is no longer available – but for many self-employed people, their chances of being able to borrow are still just as good as anyone else’s.

In any case, the products in question – known as self-certification mortgages – have been outlawed because lenders and borrowers alike were abusing them. The loans, which enable people to borrow without having to prove their income, were originally aimed at a tiny minority of self-employed people with special circumstances, but ended up being sold much more widely.

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What was a self certification or self cert mortgage?

Self-certification mortgages, also known as ‘self-cert’ mortgages enabled individuals to borrow without needing to prove their income. They were removed from the market by the Financial Conduct Authority back in 2014, because it was felt that they were not suitable for the general market and presented a risk for the consumer.

However just because self-certification mortgages are no longer available doesn’t necessarily mean it’s really difficult for self-employed people to get a mortgage. As long as you can prove your income as a self employed person in theory you have access to exactly the same range of mortgage products as everyone else.

Options for self employed mortgage borrowers

In theory, self employed borrowers have access to exactly the same range of mortgage products as everyone else. The key is that you will have to be able to prove you have the income necessary to make the repayments on the loan for which you are applying.

Typically, that will require you to have at least two years’ worth of company accounts, SA302s or tax returns – to show to lenders (though a few may request three years’ worth). If you are self employed as a Contractor you may also have to provide evidence of work you have already lined up for the future, in order to show that your current levels of income can be maintained.

However, even if you don’t have two years’ worth of records, you may still be able to get a mortgage.  Self employed workers who have a regular track record of contract work may be able to use this to their advantage. Also, if you already have a home loan, but wish to remortgage – to move home or simply to get a better deal – your existing lender may be more sympathetic, especially if you have a good history of making repayments on time.

Which mortgage will I get?

There are a handful of specialist lenders who offer products designed specifically with the self employed in mind. But mainstream mortgage lenders routinely lend to the self-employed too and you may not need to use a specialist.

You should have full access to the choice between fixed and variable rate mortgages including tracker mortgages, so there’s no reason to worry about this.  If one lender’s request is overly onerous, consider looking elsewhere. And always shop around for the best rate, since some lenders feel more comfortable about self-employed borrowers than others.

Help for the self employed borrower

There are certain traps that self employed mortgage borrowers need to watch. For example, your accountant will see it as part of his job to minimise your tax bill using legitimate methods to reduce your taxable income – but this could count against you when applying for a mortgage. Also, many self employed people also earn money through the PAYE system, which can make their business income seem lower.

For these reasons – and given the other challenges they may face when applying for a mortgage – it’s really useful for self employed workers to take impartial and expert advice on getting the best possible mortgage deal.

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Bridging Loans

A bridging loan or bridge loan is a short term loan given to ‘bridge the gap’ between you buying a new house and selling your previous house.

Secured Loans

Secured loans – also known as homeowner loans, home loans or second-charge mortgages – allow you to borrow money while using your home as ‘security’ (also called ‘collateral’). This means the lender can sell your property if you aren’t keeping up with repayments, as a way of getting their money back.

Expat Mortgage

An expatriate (often shortened to expat) is a person either temporarily or permanently residing in a country other than that of their citizenship

Portfolio Mortgages

There are now 2.5 million landlords in the UK and successful investors have been able to establish a Buy to Let portfolio of a number of properties. But changes by the Prudential Regulation Authority have introduced new checks for Buy to Let portfolio mortgages.

Offset Mortgages

The idea behind an offset mortgage is simple and straightforward. By linking your mortgage and your savings, you can bring down the cost of your loan. This is because rather than earning interest, your savings reduce the amount of interest you pay on your mortgage.

Self Employed Mortgages

ne of the misconceptions about the mortgage market is that it is now very difficult for self employed people to get a self employed mortgage loan in order to buy a home. It’s certainly true that one type of mortgage used by the self employed in the past (self certification mortgage) is no longer available – but for many self-employed people, their chances of being able to borrow are still just as good as anyone else’s.

Contractor Mortgages

Being a contractor can offer you flexibility and independence, but also uncertainty – especially when buying a home. But as the number of freelancers and independent contractors in the UK climbs, don’t despair – many mortgage lenders could be willing to lend to you, even if your income jumps around.

Self Build Mortgages

Building your own home is not for the faint hearted. And on top of everything else, you’ll need to take out a special self build mortgage to finance it. We can walk you through the self-build process step-by-step, from finding land to hiring professionals to help you.

Private Bank Mortgages

Many borrowers needing a larger loan are unaware of the bespoke offerings that private banks have. With a product specifically tailored for you and your income, you may be surprised what our relationships in this area can achieve.

Commercial Mortgages

Are you looking to expand your business? Have you realised that the cost of renting has become too great? If so, you might find that a commercial mortgage can offer business finance options you weren’t aware of. Here’s everything you need to know.

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The legal bit...

Mint FS Limited, trading as “Mint Financial Services” or “Mint FS” is an appointed representative of HL Partnership Limited, which is authorised and regulated by the Financial Conduct Authority. Mint FS Limited is registered in England and Wales with company number 11993128. Registered Office: Unit 6 The Centurion Centre, Castlegate Business Park, Salisbury, Wiltshire, SP4 6QX. The information contained in this website is subject to UK regulatory regime and is therefore intended for consumers based in the UK. Calls may be recorded for training and security purposes and to improve the quality of our services. Mint FS Limited have no control over and are not responsible for the content of other sites. Your home may be repossessed if you do not keep up mortgage payments on it. A fee is payable at outset. We charge a minimum of £395 up to a maximum of 1.5% of the loan amount.