If you’re self-employed, you may have wondered whether getting a mortgage is more difficult than it is for someone in employed work. The good news is that being self-employed does not stop you from securing a mortgage. In fact, there are many lenders across the UK who specialise in helping self-employed applicants.
Whether you’re a sole trader, limited company director, contractor, freelancer or business partner, the key is understanding how lenders assess your income and ensuring your application is presented in the strongest possible way.
At Instant Mortgage Solutions, we help self-employed clients secure mortgages every day. With access to a wide range of lenders, we know which lenders are more flexible depending on your circumstances and can guide you through the process from start to finish.
Can You Get a Mortgage If You’re Self-Employed?
Absolutely.
Many people believe self-employed applicants struggle to obtain a mortgage, but that’s one of the biggest myths in the industry. The reality is that lenders simply need confidence that your income is stable and sustainable.
Unlike employed applicants, who usually provide payslips and a P60, self-employed applicants are assessed using business income and trading history.
Every lender has its own lending criteria, which is why expert mortgage advice can make such a significant difference.
How Many Years of Accounts Do You Need?
One of the most common questions we hear is:
“Can I get a mortgage with only one year’s accounts?”
The answer is yes -although it depends on the lender and your individual circumstances.
Many high street lenders prefer to see two years of accounts, but several lenders will consider applicants with just one year’s trading history.
If you’ve recently become self-employed but have years of experience in the same profession, this can often strengthen your application. For example, someone who spent ten years working as an employed electrician before becoming self-employed may be viewed more favourably than someone entering a completely new industry.
What Documents Will Lenders Ask For?
The exact documents vary depending on the lender, but you’ll usually be asked to provide:
- SA302 tax calculations
- HMRC Tax Year Overviews
- Business accounts
- Personal bank statements
- Business bank statements
- Proof of identity and address
- Details of any existing financial commitments
Having your paperwork organised before applying can help make the mortgage process much smoother.
How Much Can You Borrow?
There isn’t a single answer because every lender uses different affordability calculations.
The amount you may be able to borrow depends on factors such as:
- Your annual income
- Business profits
- Salary and dividends
- Retained company profits (accepted by some lenders)
- Existing loans or credit commitments
- Household expenditure
- Number of dependants
- Your deposit
- Your credit history
This means two lenders may offer very different borrowing amounts even when looking at exactly the same applicant.
Rather than relying solely on online mortgage calculators, speaking to a mortgage adviser can provide a much clearer picture of your options.
Does Your Business Structure Matter?
Yes.
Lenders assess different business structures in different ways.
Whether you’re a:
- Sole trader
- Limited company director
- Freelancer
- Contractor
- Partner in a business
can affect how your income is calculated.
For example, many lenders assess limited company directors using salary and dividends, while others may also consider retained company profits. This can significantly increase the amount some directors are able to borrow.
Choosing a lender that understands your business structure is often one of the biggest factors in securing the right mortgage.
Is a Larger Deposit Helpful?
Generally, yes.
While it’s still possible to obtain a mortgage with a smaller deposit, having a larger deposit can:
- Increase your choice of lenders
- Unlock more competitive interest rates
- Reduce your monthly repayments
- Improve the overall strength of your application
If you’re able to save a little more before applying, it may be worthwhile discussing the benefits with your mortgage adviser.
How Can You Improve Your Chances of Approval?
Preparing early can make a significant difference.
Some simple steps include:
- Keeping your accounts up to date
- Submitting your tax returns on time
- Maintaining a good credit history
- Avoiding unnecessary borrowing before applying
- Keeping your business and personal finances organised
- Saving as much deposit as possible
- Speaking to a mortgage broker before submitting an application
Many mortgage applications are delayed or declined simply because the wrong lender was chosen – not because the applicant wasn’t suitable.
Should You Apply Directly to a Bank?
You can – but remember that a bank can only recommend its own mortgage products.
Mortgage lenders all have different affordability models and lending criteria. Some are far more flexible for self-employed applicants than others.
Using a whole-of-market mortgage broker means your circumstances can be matched with lenders who are more likely to accept your application, potentially saving you time, unnecessary credit searches and disappointment.
Why Choose Instant Mortgage Solutions?
At Instant Mortgage Solutions, helping self-employed clients is one of our areas of expertise.
Whether you’ve been trading for one year or twenty, we’ll take the time to understand your business, explain your options clearly and recommend lenders that best suit your circumstances.
Our advisers work with a wide panel of UK mortgage lenders, giving you access to mortgage solutions that may not be immediately obvious when approaching just one bank.
We pride ourselves on providing straightforward advice, excellent customer service and support throughout the entire mortgage journey – from your initial enquiry through to collecting the keys to your new home.
Frequently Asked Question
Can I get a mortgage with one year’s accounts?
Yes. Several lenders will consider applicants with only one year’s accounts, depending on your experience, income and overall financial position.
Can limited company directors get a mortgage?
Absolutely. Many lenders offer excellent mortgage options for limited company directors, although they may assess income differently.
Will being self-employed reduce how much I can borrow?
Not necessarily. Some self-employed applicants can borrow similar amounts to employed applicants, while others may even benefit from lenders that take retained profits into account.
Is it harder to get a mortgage if my income changes each year?
Not always. Many self-employed people have fluctuating incomes, and experienced lenders understand this. The key is choosing a lender whose criteria suit your circumstances.
Speak to a Self-Employed Mortgage Expert
Every self-employed business is different, which means every mortgage application is different too.
If you’re unsure how much you could borrow, whether one year’s accounts will be enough, or which lenders are likely to consider your application, we’re here to help.
Contact Instant Mortgage Solutions today for friendly, expert mortgage advice tailored to self-employed applicants across the UK.
