Self employed - what are my mortgage options?

Posted on 30 January 2010 by Emily


My partner and I are first-time buyers looking at properties between £150,000 and £180,000. My partner is employed but I have been self-employed for just over one year. We would be able to supply a deposit of £40,000-£50,000. Do you think lenders would be willing to give us a mortgage or do I need to wait until I have been self-employed for longer? What sort of mortgage could we hope to get?
 
Thank you

Emily

Lenders will normally look for 2 years accounts for self employed applicants, which means you need to have been trading for at least 3.  There are still lenders who will look at less than 2 years accounts, especially if you have saved a deposit of 25% or more and you may want to consider restricting the amount you borrow to ensure it fits these parameters.

Lenders will want to see 6 months business and personal bank statements to build up a picture of your income and expenditure.  This is particularly important because they are looking for you to prove your ability and willingness to pay the monthly mortgage payment.  If you can demonstrate a history of regular monthly savings and/or a monthly rental history at a similar level to the future mortgage payments this can give the underwriters the flexibility needed to agree a mortgage for you.

You have saved a good deposit and depending on your previous employment and work experience, a good independent mortgage adviser should be able to negotiate a high street mortgage rate for you. 

Peter

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