What is a Self-Employed Mortgage?

Being self-employed can make it hard to get a mortgage. Here at Finance Advice Centre, we are whole of market advisors. This means we have access to all lenders to get you the best deal no matter what your situation.

What about the length of accounts?

We have the options available to gain a mortgage for you with less than 1 year’s accounts. This is possible if you are in a profession such as a doctor, solicitor, dentist, architect, or vet to name a few.

What counts as being self-employed?

You will be viewed as self-employed by lenders if you own more than 20-25% of a business from which you earn your main income. For example, you could be a sole trader, a contractor, or a company director.

How do you get a self-employed mortgage?

In theory when you are self-employed and looking for a mortgage you will have the same options as anyone else and you will need to pass the lender’s affordability tests like every other borrower. However, without an employer to vouch for your wage self-employed people need to provide much more evidence of their income than other borrowers.

What do you need to provide for a self-employed mortgage?

As proof of your income when you apply for a mortgage typically you will need to provide: Two or more years certified accounts (as previously mentioned we work with lenders who will accept your application with less than this but in general this is the standard) SA302 forms or a tax year overview from HMRC for the past two or three years

What are self-certification mortgages, and can you still get one?

Self-certification or self-cert mortgages were designed specifically for self-employed people and allowed them to self-certify how much they earnt within any given year and no need to provide any evidence.

Do self-employed workers pay higher mortgage rates?

Self-employed mortgages aren’t necessarily more expensive, as long as you can provide enough suitable information about your income you can qualify for the same mortgage deal as someone with a similar salary in a permanent, full-time job. The mortgage rate you receive is more likely to depend on how much deposit you have saved to put down and your credit rating.

How can you boost your chances of getting a self-employed mortgage?

As with any mortgage applications there are steps you can take to improve your chances of being accepted. These include: Save as much as you can for a deposit Check your credit rating and do what you can improve if it’s too low Correct any mistakes on your credit report

How can you find the best self-employed mortgage deals?

The best way to find a competitive mortgage is by shopping around as much as possible and comparing deals from different lenders. Remember when you are comparing deals to factor in the cost of any fees as you could find it is cheaper to go for a mortgage with a higher interest rate but a lower fee.

How does the set-up of your business affect your mortgage chances?

The structure of your business can influence how lenders view your income when you are applying for a mortgage. See how lenders view each of the three main business structures below.

How much can you borrow for a self-employed mortgage?

Each lender has different criteria and policy on how much they will lend to a borrower. In this case it doesn’t really matter whether you are employed or self-employed, as long as you meet the criteria set out by the lender you can typically borrow up to 4.5 times your annual income.

Is it more difficult to get a self-employed mortgage as a contractor?

Applying for a mortgage as a contractor can be quite tricky sometimes. In part this is because lenders will have different criteria on what defines a contractor, which will in turn dictate how much mortgage you can get. Typically, you are either an employed person working on a fixed or short-term contract, or you are self-employed and work through one main company.

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Buying a financial product such as a mortgage can be the biggest decision made in our lives. It is for this reason that impartial advice is critical from qualified advisors.

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Find a suitable £100,000 mortgage deal

A lot of new buyers in the market want to opt for a £100,000 mortgage to help them buy the property they want. However, a £100,000 mortgage is a large sum and many people have been declined in the past or have a poor credit history.

If you are looking to get a £100,000 mortgage you might be wondering what the monthly repayments would be, how much deposit you would likely need and how the length of the term will impact your affordability. We can answer these questions below and if you need guidance on any mortgages get in touch with our Finance Advice Centre team today and our specialist advisers will be on hand to help.

What are the monthly repayments on a £100,000 mortgage?

The answer to this question will depend on a number of factors. Firstly, you should consider the interest rates as they can differ from lender to lender as they are based on your credit rating, affordability, and overall eligibility. Also, an important factor to take into account is the term length on your mortgage, the longer the term length the less you’re likely to pay each month. For example, if your term is 25 years with a 3% interest rate your £100,000 mortgage repayments could typically be about £474.21 but this is just an estimate for illustrative purposes. You should consult a mortgage broker or lender for the most up to date information and interest rates.

The interest rate you will have if you borrow a £100,000 mortgage will be based on how much risk the lender is taking which they will determine by how much deposit you are able to put down and your ability to make repayments. If you need more information on mortgage repayments on £100,000 contact us now and our advisers will be able to give you an idea of the kind of rates you could get based on your personal circumstances, eligibility, and affordability.

How long does it take to pay off a £100,000 mortgage?

Many people looking at mortgages and property raise this question frequently because everyone wants to know how long it’ll take to clear their mortgage and not have to make those payments anymore. It all comes down to the term length on your mortgage and how long you are able to take out your mortgage for will be based on how much you are able to pay each month.

A longer term will typically mean lower monthly payments but also more interest, meaning in the long run the overall cost will be higher. You can make significant savings if you take out your mortgage over a shorter term, but this can’t always be done as a lot of buyers wouldn’t be able to afford the higher monthly repayments.

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Choosing a financial product or service, such as a mortgage, remortgage, loan or insurance can be daunting and your choice is a decision you need to get right. For this reason, it is vital that you get impartial advice from competent and qualified advisors. Whether you are a first-time buyer, looking to remortgage, hoping to remortgage or even buy a property to let, needing a loan or insurance this is where our advisers excel.

Be reassured that our aim is to guarantee reliable financial advice appropriate to any individual that makes contact with us. Through our network of contacts, we have access to thousands of financial products, from mortgages to loans to insurance, so we are confident that we’ll find one to suit you.

Does being self-employed have an effect on getting a £100,000 mortgage?

If you are self-employed or a large amount of your wages comes from extra sources such as overtime, commission, or benefits, lending may not be quite as easy as every provider will have different criteria on what they perceive as declarable capital. Therefore, if you are self-employed or earn a “non-standard” it is recommended that you get specialist advice from our team and we can direct you to the suitable lenders that can accommodate your circumstances.

How much deposit is needed on a £100,000 mortgage?

Lending a mortgage is based on how much you need to borrow from a provider offset against the value of the property which is known as the loan to value (LTV) ratio. For example, if you put down a deposit of £10,000 on a property worth £100,000 you would own 10% outright and need to borrow 90% of its value from your mortgage lender so your LTV ratio would be 90%.

The maximum LTV you can get on a residential property in the UK is 95%, so in that case you would need at least £5,000 as a deposit to get a mortgage on a house worth £100,000. Some mortgage providers might insist that you put down more of a deposit however, if you have any bad credit, to reduce the risk involved in lending to you.

Is it possible to get a £100,000 mortgage with no deposit?

Most mortgage providers in the UK no longer offer 100% mortgages so you would need some form of deposit for a £100,000 mortgage. One of the few ways to get a mortgage without paying a deposit is if a family member or close friend acts as your guarantor. With a guarantor mortgage whoever is supporting you will need to offer their own property as collateral to secure the loan or pay a lump sum into a savings account held by the lender. They won’t be able to withdraw any money from this account until a certain amount of the mortgage has been paid off and could be liable to make any payments that the borrower misses. Find out more about £100,000 mortgages and any other type of mortgage by speaking to our expert advisers today at Finance Advice Centre.

As a mortgage is secured against your property, it may be repossessed if you do not keep up the mortgage repayments.

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