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Mortgages for the self employed
With the UK's entrepreneurial culture many more people are self employed running their own business or acting as a self employed consultant. In the old days the self employed found it more difficult to get competitive mortgages but in today’s market place most lenders will happily accept self employed borrowers. The key question is whether or not you can prove your earnings over a reasonable period of time – normally 2 years. If that’s the case then we will be able to help you get one of our great mortgage deals that are open to all borrowers and you should be able to get a market leading rate.
Its also particularly worthwhile looking at Offset mortgages, which we review separately in the site. These loans allow you to offset any savings against your mortgage and thereby get a return on your savings equal to the mortgage rate net of tax. So if you are putting money away for your tax bill or other business uses you can make some really significant savings.
The self certification mortgage
If you can’t prove your income, then a self certified mortgage may be the answer. Despite the bad press these have received provided you don’t inflate your income dishonestly to get a larger loan, they enable people who have just started trading or who are temps, freelancers or others with multiple income sources to get mortgages where they may not have been able to in the past.
How much can I borrow?
The maximum you can normally borrow on a self certification loan is 90% of the value of your property. You have to declare your own income on the application without having to provide the evidence of income that is usually required by lenders. Instead the lender will carry out a credit check and credit score. In some cases, they may request a current lender reference or landlord’s reference. And they always reserve the right to ask for further information.Because the risks are higher lenders normally charge a higher rate for self certification mortgages, but you can reduce this premium with a larger deposit. It’s a complex market but precisely because of this ITV Local Mortgages are ideally placed to help you as a self employed borrower get the very best deals from the whole market.
We charge a simple one off fixed fee of just £195 for remortgages, £375 for purchases, £750 for buy to let and £995 for credit impaired-mortgages.
Alternatively, for purchase and remortgage business for your own residence you may pay a fee of 1% of the mortgage (2% for credit impaired mortgages) and any commission received from the lender will be returned to you after completion. The minimum fee is £1,000 (£2,000 for credit impaired mortgages). On a mortgage of £180,000 the fee payable on completion would be £1,800 (£3,600 for credit impaired mortgages).
Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage.