Self Employed mortgages guide
Traditionally, people who are self-employed or work on a contract basis have been
treated differently by mortgage lenders.
Some high street lenders request 3 years full audited accounts before considering
lending and may also require projected profit figures and business plans. There
are now specialist lenders who understand the difficulties faced by self-employed
applicants and offer a range of mortgages to help meet their needs.
As this area of the mortgage market is complex we recommend you seek the advice
of a professional mortgage adviser who can assess you individual circumstances and
find the right mortgage for you. Here at Pink we offer professional advice from
a team of professional mortgage advisers who can help you make the right decisions.
Specialist lending
A specialist self employed lender will be willing to consider your individual circumstances
and will be more flexible if you are unable to provide them with full accounts.
However most lenders do have a minimum period they will expect you to be self-employed
for and this usually starts from 12 months.
Financial matters
How much can I borrow?
The amount you can borrow will be based on an assessment of your individual circumstances.
Lenders have different methods to calculate maximum lending either based on the
traditional income multiple i.e. 3 x your annual income or on an affordability basis
where a computer based model is used.
What fees are involved?
There are a number of fees that you will need to budget for. An up front valuation
fee will be required, the cost will vary according to the estimated value of the
property and it's location.
Some lenders will require arrangement and rate reservation fees, either to be paid
up front or in some circumstances be added to the mortgage advance.
You will also need to consider solicitor's costs, buildings insurance, stamp duty
fees and any service charges that will apply if the property is a flat.
The overall cost for comparison is
4.9% APR. The actual rate available will depend upon your circumstances. Ask for a personalised illustration.