Self-Employed and Freelance Mortgages

When you phone us, you can either arrange a phone appointment with your adviser or a face-to-face meeting – whatever suits you. Your adviser will ask you some questions then go away and find you the best deal for your circumstances and future needs. They’ll organise a follow up during which they’ll present you with what they’ve found.

After you’ve secured a DIP, you’ll be in a great position to make an offer on a property. Sellers like DIPs. They show you can afford the purchase. What’s more, the fact that you’ve already started preparing for the transaction highlights to them that you’re serious in your intention to buy.

Following the acceptance of your offer, we’ll send you some information which explains all the documents we need to submit to the lender. You’ll be assigned a client relationship manager who’ll check and submit certified copies of your documents; they’ll liaise with both you and the lender. Your adviser will then submit the fully packaged self-employed and/or freelancer mortgage application.

The lender will underwrite your application; this basically means they’ll verify that the information you’ve provided is correct and review all your documents for themselves. They’ll also instruct a mortgage valuation on the property you want to buy to make sure there are no significant problems with the property and that it’s worth the amount you want to borrow.

If the lender is happy with everything they’ve found, they’ll send you a mortgage offer. They’ll also send us a copy.

After you’ve accepted your mortgage offer, you’ll go through the legal part of the process, known as conveyancing. This is where the solicitors/conveyancers draw up contracts and organise the actual, legal purchase of the property. You’ll also need to arrange buildings insurance at this stage, making sure it’s in place from exchange. Find out more about when you need a mortgage conveyancing solicitor.

Once everything is in place, your conveyancer/solicitor will exchange contracts with the seller’s conveyancer/solicitor. If your deposit is coming from savings or a gift, then it’s at this point that you put the deposit down and are legally bound to the property. You’ll lose your deposit if you pull out after exchange.

The purchase completes when the money is transferred on an agreed-upon date. This is when you get the keys to your new home. If your deposit is coming from the sale of your current property, then it’s transferred at completion as part of the whole purchase.

Yes, you can get a mortgage as a freelancer. You will normally have to provide more detailed income information and documentation, such as 1 to 3 years of tax returns, invoices, contracts, or bank statements covering a longer time period compared to employed applicants. However, as long as you meet the lender’s criteria, you should have no problem securing a freelance mortgage at a competitive rate.

Yes, it’s possible to get a mortgage with a mixture of employment types, but it’s a little more complicated. Your employed and self-employed incomes are assessed separately and will both have an income multiple applied to evaluate your maximum loan value.

Generally, most lenders expect you to have been self-employed for at least 2 years to count your self-employed income. The main issue a mortgage provider will assess is whether your combination of employment types has been consistent and is likely to remain so in future, and how this affects your affordability.

The minimum amount of time that lenders will expect you to have been freelancing is at least a year, but you’ll have more lenders available to you if you’ve been freelancing for 2 or 3 years. The longer you’ve been freelancing and the more proof you have of a steady income, the more likely you are to be approved for a freelance mortgage.

Normally, you need to be self-employed for at least a year to qualify for a mortgage but they’ll more lenders able to consider you if you’ve been self-employed for at least 2 or 3 years. As with freelancing, the longer you’ve been self-employed and can show a regular, stable income, the more likely you are to be approved for a mortgage.

As a freelancer, your income will normally vary from month to month and possibly year to year. This makes determining how much you can afford to borrow more difficult compared to employed individuals with a specified monthly and annual income.

Most mortgage providers will use the last 2 – 3 years’ net income to work out your maximum loan value. They may also look at your contracts or use your day rate in calculations.

Most lenders will work out your affordability as a multiple of your average annual salary. The maximum loan value you’ll be approved for is typically at least 3x your average annual earnings but can be up to 5x or 6x depending on your circumstances and the lender.

You’ll normally need your last 1 – 3 years of accounts, tax calculations and summaries. You’ll also typically be asked to provide your credit report and the past 3 months of bank statements. Depending on your work structure, you’ll either need an SA302 tax return, or your accounts signed off by a qualified accountant to apply for freelance mortgages.

If you don’t have tax returns, you may be able to use alternative documentation, such as several months or years of bank statements, invoices or client contracts, to demonstrate your income stream.

It’s possible to get a mortgage with only 1 year’s worth of accounts, but it will limit the lenders available to you as most lenders generally use the past 2 years of net profits before tax to calculate what to lend to you.

Some mortgage providers may be willing to accept other documentation as proof of income, such as contracts or invoices. However, this will depend on the flexibility of specific lenders and their self-employed mortgage requirements.

When you remortgage, you take out a new mortgage with a new lender. So, you’ll be able to remortgage onto a new product even if you were employed when you took out your first mortgage.

You should start to look at the self-employed mortgages available to you at least 3 months before your current mortgage comes to an end. It’s possible your current mortgage provider may not be able to approve you for a mortgage if the criteria and affordability checks they use don’t align with your situation. Be prepared to provide more detailed information on your self-employed income, and to shop around for different lenders and mortgage deals.

Learn about remortgaging on a part-time contract while self-employed here.

Self-employed people can apply for multiple mortgages in much the same way as employed people. As with any self-employed mortgage, the key difference is the information that you’ll be required to provide and how lenders assess your risk level and affordability.

You don’t need a mortgage broker or adviser that only specialises in helping the self-employed, as self-employed people have access to the same mortgages as employed people. Nonetheless, our advisers at John Charcol have loads of experience helping self-employed people secure standard and specialist mortgages. We know what information the lender needs from you and can guide you through it all, step by step.

The flexibility of self-employed work tends to mean your income fluctuates. This can make it more difficult for lenders to assess your finances and how much you can afford. Self-employed people therefore have to provide different information which can make the process a little more complex but not necessarily harder.

There are plenty of high street and specialist providers who understand the nature of freelance, contract or self-employed work and are happy to lend to self-employed individuals. Using an experienced self-employed mortgage adviser can be a good way of making sure you have access to the right lenders and mortgage products.

The best mortgage lender for you will depend on your situation, self-employment aside. Nonetheless, some lenders may require only 1 year of accounts and tax returns, which may suit you better if you haven’t been self-employed for a particularly long time. We’ll base our recommendation on your individual circumstances and find you the most suitable lender and cheapest product.

As self-employed mortgages are the same mortgages that are available to employed people, the rates offered are also the same. Residential mortgage rates typically range from 4% – 6% (06/2023).