The mortgage landscape is constantly changing and none more so than mortgages for self-employed people. Ten years ago, the self-employed could ‘self-cert’, meaning they were able to simply verbalise how much they earn in a year, with no evidence. These types of mortgage were banned in 2014, as there were concerns that borrowers were getting mortgages they were unable to repay. Things are trickier these days and although the thought of getting a mortgage if you’re self-employed can feel a little daunting, there are some steps you can take to make the process easier. Read on for some tips as to how to get a mortgage if you are self-employed.

Credit score

Checking in on your credit score should be a monthly administrative task, and it is never more important than when you are seeking a mortgage. It will show you if there are areas in which you can improve; for example, by reducing your credit card spending, while giving you the opportunity to highlight any errors to your lenders. By keeping on top of your score, you will be more likely to be accepted for the mortgage most suited to your needs .

Evidence

Prior to applying for a mortgage, you will need as much evidence of your income as possible, which will probably be calculated as an average of the past three years. To prove your income, you will need your SA302 paperwork, as well as two years of certified bank accounts. If you haven’t been trading for three years, it makes it a little more difficult to prove your income, although not impossible. If you are a company director, you will also need to show evidence of dividends or retained profits, and contractors will be required to demonstrate evidence of upcoming contracts. It’s advisable to present accounts prepared by a chartered accountant.

Bills

You will need to show your lender how you spend your money so they can work out how much you can afford to repay each month. It’s wise to prepare for this in advance, both to be confident about your own expenditure and affordability, and to ensure you have the answers your lender will need to calculate how much they are able to lend you. You will probably need to talk about all areas of spending, including travel, household bills, childcare, socialising, credit commitments and hobbies.

What sort of mortgage deal will I get?

Self-employment doesn’t preclude you from getting a mortgage, but you will need to work a little harder for it. As long as you can evidence your income and expenditure, there’s no reason why you won’t be able to get a similar deal to someone on an annual salary. You can boost your chances by saving a substantial deposit, making sure you are on the electoral roll, and ensuring your credit score is up-to-date and in good order. A mortgage broker will be able to help you find a deal that suits your circumstances.