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You can still get a mortgage when you’re self-employed, a freelancer or a contractor if you meet the lender’s criteria.
In fact, getting a mortgage when you’re self-employed isn’t that different from getting one when you’re employed. You have access to the same mortgages and lenders as an employed person. You don’t need to take out a specific “self-employed mortgage” or “contractor mortgage” from a “self-employed mortgage lender”. You just need to provide the normal mortgage lender with different information about your income so they can determine how much you can borrow.
See How Can I Prove My Income as a Contractor? or Self-Employed Professional below for information on the documents you need to provide.
Find out how much you could borrow with our free, self-employed and contractor mortgage calculator.
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We work around your schedule to help you arrange a mortgage that suits your circumstances, no matter how complex.
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.
Once you’re happy with their recommendation, they’ll go about securing your DIP (Decision in Principle) - which is basically a promise from the lender that they’ll loan you money on the condition that the information you’ve provided is correct and subject to a valuation of the property.
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 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.
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.
With JC Legal, we have access to a carefully selected panel of experienced solicitors and conveyancers so we can find you a solicitor to take care of the conveyancing part of your homebuying journey.
To prove your income as a contractor, you’ll need to provide the lender with:
There are lenders that will still consider your application if you’ve only been contracting for less than one year but can provide evidence of regular work in the same industry or role.
To prove your income as a self-employed professional or a business owner, you’ll need to provide the lender with:
Send us your details and we will help find the mortgage that's right for you:
It is possible to get a mortgage as an independent contractor, you just need to provide evidence of past and future work. There are even some lenders that will consider applications from people who’ve been contracting for less than a year if they can provide a track record of regular work in a similar role.
Lenders look at your net profits before tax from the last 1 or 2 years.
You need to have been self-employed for at least a year to qualify for a mortgage.
It is possible to get a mortgage with only one years’ worth of accounts, but it will limit the lenders available to you as most lenders generally use the last 2 years of net profits before tax to calculate what to lend to you.
If you’re a contractor, you need:
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 don’t need a mortgage adviser that only specialises in helping the self-employed as self-employed people have access to the same mortgages as employed ones. Nonetheless, our advisers at John Charcol have loads of experience helping self-employed people secure mortgages. We know what information the lender needs from you and can guide you through it all, step by step.
The best mortgage lender for you will depend on your situation, self-employment aside. Nonetheless, some lenders may require only one 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 and contractor mortgages are the same mortgages that are available to employed people, the rates offered are also the same. Residential mortgage rates typically range from 1.2% to 3%.