Self-Employed Mortgage First Time Buyers
- Proud to provide a 5 star service designed to take the stress out of getting a mortgage.
- We’ll find you the most suitable mortgage for you, searching the whole of the market to find the right deal with the right lender.
- Available to assist clients across the UK with a variety of mortgage needs, from First Time Buyer, Home Mover, and Remortgage and everything in between.
Get In Touch
Self-Employed Mortgage First Time Buyers
How does getting a mortgage as a self-employed First Time Buyer work? Is it difficult?
I think the most important thing is being organised. If you’re self-employed, you need to have your tax returns or accounting information to hand when you’re speaking with a bank or a mortgage advisor.
Having that information will ease the process massively in providing the information the lender is going to ask you for as a self-employed First Time Buyer. If you have all those tax returns or your accounts, then in theory, it’s no more difficult than for an employee with payslips.
Having a mortgage advisor who understands self-employed mortgages on your side will make that whole process a lot easier for you. They will guide you through and put your information in front of the right lender.
How many years do you have to be self-employed to get a mortgage as a First Time Buyer? Does being a First Time Buyer make a difference?
Technically, no, it doesn’t matter whether you’re a First Time Buyer or a home mover. As a general rule of thumb, lenders are looking for completed tax years. The tax year runs from April to April and as a minimum, we really need to see that you have been self-employed for one full tax year.
To have access to a wider choice of lenders, having been self-employed for two tax years or more will open the door to more options.
How much can I borrow for a mortgage if I’m self-employed and a First Time Buyer?
How much you can borrow will be based on the income you’ve declared for tax purposes, or that you’ve drawn out of the business if you’re a limited company director.
The way lenders assess that income differs greatly from one to another. Some will take an average of the last two years, while others might just look at the latest year.
If you’re a limited company director, there are even more ways lenders can look at it. So, to get the most accurate borrowing figure for your circumstances, talk to a mortgage advisor who fully understands self-employed mortgages.
We will look at your particular circumstances and work out exactly how much you could borrow and also, importantly, what would be affordable for you as a self-employed First Time Buyer.
Speak To an Expert
How is a mortgage calculated for a self-employed First Time Buyer in the UK?
It comes down to your tax returns which confirm the income you’ve paid yourself in previous years. We’re looking backwards at the income declared to HMRC.
Each lender uses different calculations on those figures so, again, it comes back to speaking to somebody who fully understands how all those different lenders work and how they’re going to calculate your income.
What documents do I need to apply for a mortgage as a self-employed First Time Buyer?
Proving income as a self-employed First Time Buyer generally requires you to either have an accountant or to self-assess with the inland revenue.
If you’re a sole trader, you would either need to speak to your accountant to gather tax calculations, summaries and tax year overviews, or go on to the HMRC portal and download an SA302 document, along with a tax year overview document.
For a director of a limited company, it’s slightly different. Lenders would still want to see copies of your tax returns to see what level of income you’ve drawn, but they may also want to look further into your company and how it’s being run, by looking at the year-end accounts.
It will depend on your individual circumstances as to exactly which particular documents they would need to see.
What if I have bad credit as a self-employed First Time Buyer?
The good news is there are lots of options in the market for clients who may have bad credit. Lots of lenders sit just behind the well-known high street lenders and specialise in this area.
What we tend to do in most instances is ask for a copy of your credit report. That would give us all the information we need to work out which particular lender to approach, that would be happy with your credit situation.
Make sure you’re providing as much information as possible to your advisor so that they can give you the right guidance.
How do lenders calculate my income as a self-employed First Time Buyer?
It’s down to the figures on those previous years’ calculations, either through HMRC, your accountant or through limited company year-end accounts.
It’s a good idea to put yourself in front of an advisor who can take all that information and work out the most beneficial calculation of income for you as a self-employed First Time Buyer.
How can I improve my chances of getting a mortgage as someone who is self-employed and a First Time Buyer?
The biggest thing here is being organised. If you’re doing your own self-assessment tax returns, make sure that they’ve been done on time and that any tax due on that income has been paid in the previous tax years.
We have seen clients in the past where an amount hasn’t been paid or wasn’t paid on time.
Those are the things lenders look at when they’re assessing a client’s ability to then repay the mortgage.
Being organised is absolutely key. If you employ the services of an accountant, make sure they’re reporting things to HMRC when they should be and paying necessary taxes for you. Being up to date with your taxes is really important.
How do I apply for a mortgage as a self-employed First Time Buyer? How can a mortgage broker help?
If you’re looking at taking advantage of a mortgage broker’s services, you just need to be organised with the documentation and supply everything that the advisor asks you for.
Giving all your tax documents, information and credit report to an advisor will get you a better outcome. If we can present you to a lender and clearly explain your income, your credit report and your outgoings, the chances of that application going through are significantly higher than if we’re missing something, or if something hasn’t been disclosed.
So, when you come to apply for a mortgage, be as organised as you can with your documents. Then you’ll be in the right position going forward.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP WITH YOUR MORTGAGE REPAYMENTS.
