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 impartial 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.

Self-certification

Self-certification means that you simply make a declaration of your income to the lender and they base your loan amount on this figure without full detailed checks. Although additional proof from your accountant may be requested.

Lenders offer different types of self-cert options and some will ask for additional proof to back up your declared income i.e. bank statements.

Self-certification may be an option for self-employed applicants, but as this is a specialist area we recommend that you seek advice of a professional mortgage adviser. irrespective of the amount that the lender is willing to lend, the person should be comfortable that it is affordable both now and in the future should circumstances change

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 types of mortgages are available?

In today's marketplace there is a great choice of self-employed mortgages. They are available as fixed rate, discounted, tracker and flexible deals with differing options to suit your needs.

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.