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 second mortgage deal when you have bad credit

Getting a second mortgage can be a good alternative to remortgaging or taking out an unsecured loan. However, like with securing any type of credit with a bad credit score, it can be harder to find lenders that will offer you a second mortgage. Thankfully, difficult does not mean impossible.

If you are a homeowner with equity in your property, you still could be eligible for a second mortgage even with bad credit. To increase your chances of finding a second mortgage with a bad credit deal and lender, speak to one of our expert advisers at Finance Advice Centre and we can help you with every step of the process and give you the best chance of a successful application.

Can I get a second mortgage with bad credit?

It is possible that you could be able to get a second mortgage with bad credit, but your success will depend on whether you have the help of a specialist bad credit adviser like our team. With the help of an experienced adviser, you will usually have a much better chance of securing a second mortgage as your adviser will be able to find the best deals from bad credit-friendly providers.

Most providers that are not on the high street will accept many types of bad credit events, like CCJs and bankruptcy, as long as you can pass their affordability test and have enough equity in your property. Finance Advice Centre are always on hand to discuss how you can get a second mortgage with bad credit if you need professional advice.

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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.

Second mortgage with bad credit FAQs

Can I use a second mortgage for debt consolidation?

Consolidating your debts is a common reason why people seek to take out a second mortgage with bad credit. However, the credit will be secured with your property so the risk can be greater and should be thought about carefully.

What is a binding offer?

After you have received an offer for a second mortgage from a lender, you will have seven days to think about whether you want to accept it. During this time they are bound by the offer they have made and cannot change it.

How can I improve my chances of being approved for a second mortgage with bad credit?

One key thing you can do to better your chances of getting a second mortgage is increasing your credit rating. This can be done through actions such as registering on the electoral roll, paying your bills on time, checking for any mistakes or fraudulent activity on your file and more. Also, getting advice from a specialist adviser will help your chances of getting a second mortgage.

Do I need a second mortgage or remortgage?

If you are not sure whether remortgaging or getting a second mortgage is the right choice for you and your circumstances we recommend speaking to one of our advisers. They will be able to look at your personal financial situation and talk you through the differences between remortgaging and a second mortgage to offer you guidance on which route would work better for you.

As a mortgage is secured against your property, it may be repossessed if you do not keep up the mortgage repayments. Think carefully before securing other debts against your home.

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We had a long journey buying our first home together and recent pandemic events didn’t help matters. Every step of the way, our advisor Steve was supportive, positive and we had every confidence in him. He was able to arrange a good deal for us and we were able to move into our dream house this autumn.

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