Self Employed mortgages – myth busting!

Can you get a mortgage if your self-employed?

Book an appointment today to discuss your options.

 

 

Myth 1: I can't get a mortgage because I'm self-employed

The reality: Yes you can!! This is one of the biggest misconceptions we hear.

Being self-employed shouldn't stop you from achieving your homeownership goals. Whether you're a sole trader, freelancer, contractor, company director or business partner, there may be mortgage options available to suit your circumstances.

At The Cambridge, we understand that being self-employed looks different for everyone. That's why we take the time to understand your income and help you explore what's possible.

 

If you have two or more years of accounts, you can apply for any mortgage in our range (subject to affordability and our usual lending criteria). However, the great news is that if you just have one year of accounts* you could be eligible for one of our Self Employed mortgages - have a chat with a member from our expert team to find out if we could have the right mortgage for you.

*further verification of income also required - please see our Self Employed mortgages for full details.

 

Myth 2: I need years of accounts before I can get a mortgage?

The reality: At The Cambridge, we'll usually ask self-employed applicants for at least two years' accounts, along with supporting tax documentation.

Even if you only have *one year of accounts as a self employed person you could still be eligible for certain Self Employed mortgage products – although further verification of income may be required. 

*One year’s financial accounts can not be more than 9 months old

 

Myth 3: My Income Is Too Complicated

The reality: Self-employed income doesn't always look like a regular monthly salary, and that's okay.

Whether you're a sole trader, freelancer, contractor, company director or business partner, the key is being able to show how you earn your income.

At The Cambridge, we'll usually ask for:

• The last two years' SA302 tax calculations
• Tax Year vverviews
• Two years' full financial accounts for limited companies and partnerships in certain circumstances

If you complete your Self Assessment online, you can usually download your tax calculation and Tax Year Overview from HMRC or obtain them through your accountant. These may sometimes be referred to as a tax computation.

It's also worth bearing in mind that reducing your taxable income could affect how much income you're able to evidence when applying for a mortgage, so it's worth speaking to your accountant if homeownership is one of your future goals.

 

Myth 4: Self-Employed People Always Pay Higher Mortgage Rates

The reality: Being self-employed doesn't automatically mean you'll pay a higher mortgage rate.

Mortgage rates are influenced by a range of factors, including your deposit, credit history, the amount you'd like to borrow and your overall circumstances.

The most important thing is understanding what options may be available to you. If you're unsure where you stand, our mortgage advisers are here to help. They'll take the time to understand your circumstances, answer your questions and help you explore the options available. 

 

Myth 5: My Income Has Changed, So I Won't Be Able to Get a Mortgage

A lot of self-employed people worry because one year was stronger than another.

This gives you a chance to say:

Self-employed income can fluctuate from year to year, and that's not unusual. At The Cambridge, we'll take the time to understand your circumstances and the information provided as part of your application.