Facts About Mortgages for the Self Employed


One of the myths of the mortgage market is that a self-employed person will find it very difficult, if not impossible, to borrow money to buy their own home. The myth is that only employment makes finding a mortgage deal possible. The truth is that, while some self-employed people may find it tough, there are a range of self-employed mortgage options and being self-employed should not be a barrier to securing home finance.

History of Self-Employed Mortgages

In the past the mortgage for the self-employed person was the self-certification mortgage. This product is no longer available, however, because it was not properly used by lenders or borrowers. It was designed for a small portion of the self-employed population but was misold and used too widely. Other options are available today.

Options for Self-Employed Borrowers

Self-employed borrowers should have access to the same mortgage deals as other people. But to get the best mortgage deals you need to prove that your income is sufficient to meet the repayments. If you, as a self-employed person, can do this then you can access the same loans as everyone else whose income allows them to meet the financial requirements of the loan. Mainstream lenders routinely offer their deals to the self-employed, so you may not need a specialist adviser and you can pick up variable and fixed rate deals.

Eligibility for Self-Employed Mortgages

In most cases you will need to have two years of company accounts or tax returns to demonstrate that your income is at a sufficient level. You may also need to show that you have work lined up for the future in order to show that you can sustain your level of income. If you do not have two years worth of accounts you could still get a loan through a regular track record of contract work, for example. You can also get a deal if you are remortgaging and have a good track record of making payments on time.

Offset Mortgages

Offsetting your mortgage against savings can be a good option for the self-employed as the money you set aside for paying your tax bill can be counted as savings to be used to reduce the amount of interest you pay on the mortgage. This can add up to a considerable amount if you are running a business that pulls in a good income. An offset mortgage is designed to save you money on interest charges by using savings to count against your borrowing. An offset mortgage can also be used by members of the family to help out self-employed relatives.

Expert Advice

It is important to seek professional advice if you are a self-employed person looking for a mortgage. It can be difficult to prove income when accountants are paid to try to bring your taxable income down. Getting impartial advice, says flagstone.co.uk, is crucial for getting the best deal and ensuring your mortgage is affordable and suitable for your needs.

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James is a financial expert who has contributed several business and finance related articles. His expertise and first-hand knowledge of economics makes his blogs and articles informative and helpful for those looking out for guidance and assistance in matters related to finance. He has an active schedule of TV and radio interviews He is co-host of the popular VT Radio show Jim and Gordie Show. latest-articles-buttonJim comes from an old military family dating back to the American Revolution. Dozens of Confederate ancestors fought for the South in the War Between the States. Uncles fought in WWII and Korea. His father was a WWII P-40 and later P-51 Mustang fighter pilot. Vietnam found several uncles serving, a cousin, and brother Wendell as a young Ranger officer. His mother was a WWII widow at 16, her first husband killed with all 580 aboard when the SS Paul Hamilton, an ammunition ship with 7000 tons of explosives aboard, was torpedoed off the coast of Algiers. He has been writing, speaking and doing public relations, television, consulting and now multimedia work for a variety of American heritage, historical, military, veterans and Intel platforms. Jim’s only film appearance was in the PBS Looking for Lincoln documentary with Prof. Henry Lewis Gates, and he has guest lectured at the Army Command and General Staff School at Fort Gordon. Currently he is working to take his extensive historical video archives on line to assist his affiliated organizations with their website multimedia efforts, such as the Military Order of World Wars, Atlanta, Sons of the American Revolution, Sons of Confederate Veterans , Assoc. for Intelligence Officers, the Navy League, Georgia Heritage Council, National Memorial Assoc.of Georgia.

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