At Prosper Home Loans, we’re here to simplify the process and help you confidently navigate the journey toward homeownership.
Whether you’re a freelancer, contractor, or small business owner, here’s what you need to know about getting a mortgage when self-employed.
1. Understand the Requirements
Lenders evaluate self-employed borrowers differently than traditional employees. To prove your income and financial stability, you’ll need:
- Two Years of Tax Returns: Most lenders require at least two years of personal and business tax returns.
- Profit and Loss Statements: Up-to-date financial records, including profit and loss statements, help demonstrate your earnings.
- Bank Statements: Several months of personal and business bank statements can further validate your financial health.
- CIS (Construction Industry Statements): This is for tradesmen or women who typically work as subcontractors and have had 20% of their contracts deducted.
- Contractor who pays own tax, or it is deducted by umbrella company (including IR35): Copy of latest contract and latest month’s payslip(s) required (or where payslips not issued latest 3 month’s bank statements)
- Accountants Certificate: Some lenders accept accountant's certificates from qualified accountants confirming your income earned from your company.
2. Improve Your Financial Profile
Boosting your financial profile can make the mortgage process smoother:
- Reduce Debt: Lowering your debt-to-income (DTI) ratio can make you a more attractive borrower.
- Increase Savings: A larger down payment or cash reserves show lenders you’re financially prepared.
- Separate Personal and Business Finances: Clear distinctions between personal and business accounts simplify documentation and improve your case.
3. Work with an Experienced Mortgage Advisor
Working with Mortgage Advisors who understand their unique circumstances greatly benefits selfemployed borrowers. At Prosper Home Loans, we specialise in tailoring mortgage solutions for individuals like you. We’ll review your financials holistically, not just focus on your bottom line. We work with the whole market but it is important to work with the right lender for individuals with complex income due to their Self-employment.
4. Consider Alternative Documentation Loans
If your tax returns don’t reflect your actual earning potential, ask about alternative documentation options, such as:
- Bank Statement Loans: Review your bank deposits with CIS (Construction Industry Scheme Vouchers). This is usually for self-employed tradespersons working in the construction industry instead of tax returns.
- Use Limited Company Accounts: Limited company accounts can sometimes show more income than what is declared to HMRC as personal income.
- Accountants Certificate: This certificate is available for those with a qualified accountant.
- Secured Loans: These can be used using company assets, and generally, a lender will lend much more than standard high street lenders.
5. Be Prepared for a Thorough Process
While self-employed mortgages may require extra paperwork, our team at Prosper Home Loans is here to guide you through every step. By partnering with us, you’ll gain access to a team dedicated to helping you achieve your homeownership dreams.
Why Choose Prosper Home Loans?
At Prosper Home Loans, we take pride in empowering self-employed individuals with the tools and resources to secure their dream homes. Our expertise, personalised service, and commitment to transparency ensure that your mortgage experience is smooth, efficient, and stress-free.
Ready to Get Started?
Don’t let your self-employment status hold you back from owning a home. Contact Prosper Home Loans today to speak with one of our mortgage specialists. We’ll work together to find the best solution for your financial situation.
