Getting a mortgage can be a challenge at the best of times. For the UK’s nearly five million self-employed people, the process is even more difficult, but that’s not to say it is impossible…
‘All borrowers are jumping through more hoops than ever, but the self-employed will have to leap far higher,’ said a spokesperson at Moneyfacts. Indeed, since the start of the financial crisis in 2007, lenders have tightened the rules around proving income and affordability. Which is where it sometimes gets tricky for self-employed applicants.
Unlike most employees, who have a regular, fixed amount of earnings every month, income for the self-employed can vary; there will be good months and bad months. Providing evidence of income can also sometimes cause problems, for example if you have only recently started trading and therefore do not have two or three years of accounts.
As a first step, ask your lender or mortgage provider what they will accept as evidence of income – this will vary from lender to lender.
The good news is that an increasing number of mortgage providers will accept the SA302 self assessment tax calculation or a tax calculation printed from the tax return software that we, as your accountants, use.
You can print the SA302 calculation and tax year overview from your HMRC online account. In addition to this, you will also need to provide a tax year overview.
Click the link to view a list of lenders who will accept the SA302 calculation and tax year overview as proof of income.
Ensuring that your annual accounts and tax returns are prepared and submitted in good time will also help any application.
RfM Mortgage Services
RfM recently launched a range of homeowner and commercial mortgage services that are available to our clients and non-clients. We provide a free initial consultation to ensure we fully understand your mortgage or re-mortgage* needs before making any recommendations.
To arrange an appointment with an experienced independent advisor, please complete the online form at www.rfmmortgageservices.co.uk or call Sharon Rigden on 01772 431233.
*You may have to pay an early repayment charge to your existing lender if you remortgage.
RfM Mortgage Services is a trading style of Key Mortgage Advice Limited who is authorised and regulated by the Financial Conduct Authority. We are entered on the Financial Services Register No 312930 at register.fca.org.uk/
Think carefully before securing other debts against your home or property. Your home or property may be repossessed if you do not keep up repayments on your mortgage
The Financial Conduct Authority does not regulate some aspects of commercial mortgages and buy-to-let mortgages.
For information of users: This material is published for the information of clients. It provides only an overview of the regulations in force at the date of publication, and no action should be taken without consulting the detailed legislation or seeking professional advice. Therefore no responsibility for loss occasioned by any person acting or refraining from action as a result of the material can be accepted by the authors or the firm.