The information contained within this website is subject to the UK regulatory regime and is therefore primarily targeted at consumers in the UK.

The Mortgage Lady - whole of market mortgage broker with experience of the self employed mortgage  sector
Limited company, family business or sole trader - the lender still views you as self employed Limited company, family business or sole trader - the lender still views you as self employed
... a personal approach to mortgage advice for the self employed
Use MORTGAGE HOUND to search for mortgage options

or

Phone me now on:

0330 999 1955

for a free, no commitment, consultation on your self employed mortgage issues.

Janet Hall CeMAP - first choice for advice on mortgages for the self employed
Janet Hall, 115 The Street, Crowmarsh Gifford, Wallingford, Oxon OX10 8EF. Tel: 0330 999 1955
See 03309991955 on Twitter

Mortgages for the Self Employed

Self employed   ...  and unmortgageable ?

In my opinion, no sector has received a bigger knock back in terms of mortgage availability as a result of the ‘credit crunch’ than those who are self-employed or small business owners.

With the effective demise of ‘self certification’ (and I am in no way defending any sector of the finance industry that abused ‘self certification’) many of those who make up the 3.6 million sole proprietors (I am one of them!) and those who own 1.3 small businesses as companies employing some 750,000 staff will find it more difficult, and for some impossible, to obtain a mortgage.

Accounting perfectly legally for tax efficiency purposes is often not

compatible with obtaining finance, including mortgages and personal credit. Particularly, if you are reading this and have still not completed your 2011/12 accounts this may be a very good time to review you accounting and finance structures.

Sole trader, Contractor, Limited Liability partnership or Limited Company ?

Different lenders have different policies with regard to the number of years and nature of accounts required together with their attitudes to salaried earnings, gross/nett profits, dividends, declining or varying profits etc.

Whether you are a sole trader, operate through a shell company (typical IT contractor structure) or are a shareholder in a more traditional limited liability company/partnership we will be pleased to work with you and/or your accountants to plan for and achieve successful future mortgage application(s).

Many small businesses have funded their set up and/or ongoing financing by virtue of mortgaging, or guarantees against the business owner’s property. This is not necessarily the wrong think to do, but should always be approached with extreme caution and separate qualified advice about the structures, options and implications should always be taken.

There is no best structure or best mortgage for self employment - it depends on a wide set of circumstances.

One thing that is important - consistency. Before changing your employment structure (whether from employed to unemployed, from sole trader to limited company etc) ensure you have set up your financial arrangements - specifically any mortgage requirements - to cover at least the next couple of years.

The general trend is towards requiring demonstrated income from same/similar source at stable or increasing for at least two years. Income from property rentals is rarely included in such considerations.

Offset Mortgages

For many, but certainly not all, self employed an offset mortgage may be an ideal product - particularly where earnings are irregular (‘one off’ major payments rather than consistent monthly income) and/or there is a requirement to support short term investment. For more details see my section on offset mortgages.

Self Certification Mortgages

This is inevitably a very short section - they don’t exist any more! All mortgage applications must now include the collection of appropriate ‘proof of income’ documentation.

THERE MAY BE A FEE FOR MORTGAGE ADVICE - TYPICALLY 250 FOR REMORTGAGE OR 350 FOR PURCHASE - BUT UP TO 500 FOR COMPLEX CASES.
SELF EMPLOYED MORTGAGES - THE OVERALL RATE FOR COMPARISON IS 4.5%. THE ACTUAL RATE WILL DEPEND ON YOUR CIRCUMSTANCES.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENT ON YOUR MORTGAGE.
ZOOM VIEW
Janet Hall is an appointed representative of TenetLime Ltd which is authorised and regulated by the Financial Services Authority.
TenetLime Ltd is entered on the FSA register (www.fsa.gov.uk/pages/register) under reference 311266.
[HOME] [About us/TCF] [Mortgages] [First Time Buyers] [Next Time Buyer] [Remortgage] [Mortgage Structures] [Buy to Let] [Credit Impaired] [Commercial] [Conveyancing] [Insurances] [Wills & Trusts] [Divorce & Separation] [Police] [Business & Commercial] [Documents/Downloads] [Opinions] [CONTACT US]