As a self-employed individual, taking out a mortgage can be a daunting task. Without a fixed income or a steady employment history, it can be challenging to secure a mortgage.

However, with the right guidance and planning, it’s possible to find a mortgage that meets your needs.

In this article, we’ll cover off five top tips for self-employed individuals when planning to take out a mortgage, and why it’s helpful to use a mortgage broker in Bexleyheath.

1. Plan ahead and keep your financial records organized
It’s essential to keep your financial records organized. This includes keeping track of your income, expenses, and tax returns.

When planning to take out a mortgage, it’s important to have all your financial records in order as this will help you determine how much you can afford to borrow and will also make the application process smoother.

A local mortgage broker can provide you with guidance on how to organize your financial records and help you determine how much you can afford to borrow based on your income and expenses.

2. Save for a larger down payment
As a self-employed individual, you may be required to put down a larger down payment. This is because lenders could see self-employment as a higher risk than a traditional salaried employee.

Saving for a larger down payment can not only improve your chances of being approved for a mortgage, but it can also lower your monthly mortgage payments so is certainly a helpful thing to do.

Choosing a mortgage broker as opposed to going direct can provide options for lenders who may accept a smaller down payment, or help you explore alternative financing options if needed.

3. Maintain a good credit score
Your credit score plays a critical role in your ability to secure a mortgage. It’s important to maintain a good credit score to improve your chances of being approved for a mortgage.

Choosing a mortgage broker to assist you with your application means that you may be able to access lenders who are more flexible with credit scores and able to accommodate you if your score is low.

4. Minimize debt and manage your finances wisely
Lenders consider a debt-to-income ratio when reviewing your mortgage application. Minimizing that debt and just generally managing your finances wisely can help improve your chances of being approved for a mortgage.

You are also likely to be able to access more attractive products with better rates and terms with a better overall financial position.

5. Consider a co-signer or guarantor
If you’re self-employed and struggling to secure a mortgage, you may want to consider enlisting the help of a co-signer or guarantor. This can help improve your chances of being approved for a mortgage.

A co-signer or guarantor will take some degree of responsibility for mortgage repayments and therefore give lenders additional peace of mind when it comes to repayments.

Can we help?

If you’re self-employed and need assistance with a mortgage or remortgage, then our team would be happy to help. Either drop us a call on 01322 553 282 or contact us online.