Self-employed mortgage requirements: Everything you need to know.

Being your own boss comes with plenty of challenges, but getting a mortgage shouldn’t be one of them. While being self-employed can be a barrier to borrowing for some lenders, there are plenty of ways to fund your property ambitions if you fall outside of the traditional 9 to 5.

Whether you’re looking to borrow for the first time, or need to remortgage to upgrade your property or find a better deal, we’ve pulled together the key self-employed mortgage requirements to help you find finance without the fuss.

What do we mean by self-employed?

Whether you freelance, work as a contractor or run a business, you’re probably classed as self-employed. Your income may not be the same month-on-month and it’s likely that you have costs you need to take into account to work out what you earn in a year.

What’s different for someone who’s self-employed when it comes to applying for a mortgage?

Most lenders will need a good run of payslips as evidence when completing an application, which someone who’s self-employed is unlikely to have. You might have an income that varies month by month, or you might not have been trading for long, so it’s likely you’ll have to pull together some other forms of evidence. You’ll most likely need:

• Proof of ID and address

• Your bank details

• Evidence of your business income and expenditure

• SA302 forms or a tax year overview

• Evidence of profits or dividends if you own a business

• Proof of your upcoming work pipeline if you work as a trader or contractor

• Proof of accounts certified by a registered accountant

You might also need to show a lender your operating costs, travel costs, spending on office rental and supplies, credit card and loan statements and information on your car or van lease.

Not sure what you’ll need for your mortgage application? We’ve created an application checklist that can help you get the right documents together.

Do all mortgage lenders cater for self-employed people?

Although there are many lenders that will consider self-employed customers for a mortgage, those with ‘tick box’ mortgage application processes can sometimes struggle to see your suitability. Here at Together, we’re willing to look beyond your employment status and will ensure to take your whole financial situation into account. If you’ve come across a lender that won’t accept your variable income or a short period of trading, it’s definitely worth shopping around. While it can be trickier, it’s not impossible – read our blog on mortgages in the gig economy for more reassurance.

I already have a mortgage but need to make home improvements / get a better deal. Is that possible?

Remortgaging when you’re self-employed is pretty much the same as any other remortgage, but you might need to bring different paperwork to secure your deal. If you’ve already been approved for a mortgage since you’ve been self-employed, the process should be even easier.

• Read our top five tips for remortgaging when you’re self-employed so you’ve got everything lined up that you’ll need.

But what if you’re on a great fixed rate? Remortgaging to free up funds for home improvements might not be the best option as your new rate will be applied to the entire amount still outstanding on your mortgage, not just the money you need to start your renovations.

In this case, a secured homeowner loan could give you the funds required to make your improvements without disrupting an existing mortgage, as it runs completely separately. This means that it will have its own rate and terms, so you could borrow over a shorter period than remains on your current mortgage. In the long run, this could mean you end up paying back less compared to remortgaging. But, you’ll need to keep up with repayments on both your mortgage and loan each month, potentially with different lenders, and failing to repay on either could mean your property may be repossessed.

Ready to browse some of the self-employed finance products available at Together? Find out more on our self-employed mortgages page.