Mortgages for people who are self employed have become almost an endangered species. It is getting more and more difficult for people who work for themselves to get good mortgage offers. But don't despair. A specialist mortgage broker should be able to help you. Mortgages where you declare your income without proof have been banned by the FCA These loans, known as self-certification mortgages, have traditionally been the only way some of the self employed could get home finance, especially those who have recently begun trading. The Financial Conduct Services Authority (FCA) says every applicant must, in future, be able to prove their income.
So what does this mean for the self employed in getting a mortgage? If you can verify your earnings, you'll have as much chance as anyone else when applying for a mortgage. You normally have to show at least two years' tax statements or company accounts signed off by a qualified accountant (you'll be assessed on profits). Some lenders demand three years' worth. Many accountants use perfectly legal loopholes to reduce your tax burden by reducing your stated profits, this may work against you if the benefit of paying less tax is outweighed by not qualifying for a mortgage, due to lower income.
Use a mortgage broker with experience can be invaluable in helping you to navigate through the nuances of different lenders conditions. Broker can have access to mortgages you wouldn't be able to get and the argument for using a mortgage broker becomes even more compelling. This may all seem very complex but a good mortgage advisor knows all the processes involved and can help you through each step.
For more specific help and to talk through you options, call our team of expert advisers today