Self-employed

Mortgages for customers with self-employed or freelance income

If you are a business owner or company director, you may have a relatively complex income structure compared to employees on a basic salary. This can make it challenging for you to approach a lender directly for a mortgage as you may not know what your bank/ lender requires. Whether this is your salary and dividend payments or assessed from your pre or post tax net profit figures.

Our specialist mortgage advisers are well versed in dealing with varying self-employed income structures and can place your application with a lender that will view your current position in a way to maximise your lending requirements.

Examples of some of the self-employed income structures we help clients with…

Sole Trader

Most lenders using this income source will look at your net profit over the past 2 years. Typically they will average the last 2 years if the latest year has increased, but would use the latest years figures if they have decreased. We do also have access to lenders who will use the latest net profit figure regardless. So, we will look at the figures you have and determine where we can best place your mortgage application. We will ask for your last 2 years Tax Calculations (SA302s) as well as the corresponding Tax Year Overviews.

Partnership

The income is usually assessed in the same way as a sole trader, whereby they will use your share of the net profit to calculate affordability.

Ltd Company Director

This is where it can make all the difference to have a mortgage adviser involved to ensure the case moves forward smoothly. When it comes to Ltd Company directors the lenders will have different views and criteria on how they assess income. Some will use directors’ salary and dividends, others will use salary and net profit. Some will average, others use the latest. There are a lot of variables involved. We will ask for your last 2 years’ accounts as well as the corresponding Tax Calculations (SA302s) to breakdown all of your income and determine how much we can get you.

Contractors

Obtaining a mortgage when you are a contractor can often be difficult and confusing. Each lender has differing criteria and rules surrounding contractors, so where one will class you as employed, another may class you as self-employed. This is where Roxborough brokers use their skills and knowledge to ensure that we maximise your income and lending potential.

Whether you are a fixed term contractor, zero hours or day rate contractor, we have lenders to suit. We would need to look at the type of contract, length of time with the current employer, length remaining on the current contract, and contracting history. Give us a call if you’re in the contractor category and we can have a detailed conversation of your situation and gather all the necessary information to make our recommendation.

CIS Sub-Contractors in the construction industry

Whilst technically you are self-employed for tax purposes, we do have lenders available who will class you as employed. We would need to see a history of this type of income along with 3-12 months’ worth of CIS statements/vouchers depending on the lender.

IR35 Contractors

These types of contracts are getting more and more popular and lenders will have a different set of criteria for how they assess this income. Typically, lenders can use the day rate X 5 X 46 to calculate income. The length of time in this type of contract, renewal details as well as the history may impact who will lend. Lenders will usually want to see a copy of your contract, payslips as well as corresponding bank statements.