10 MORTGAGE TIPS FOR THE SELF-EMPLOYED

Get advice from a good, independent mortgage adviser. They can support you through the application process and act as an expert negotiator.

Know the definition of selfemployed. One of the biggest hindrances in securing a mortgage as a self-employed person is knowing how the term relates to your circumstances. Some lenders, for example, class ‘self-employed’ as owning 15% of a company, where it can be 25% for others.

This can be OK for a sole trader but not always for start-up founders if they’re salaried directors – because many start-ups are initially lossmaking, and lenders are typically reluctant to give them mortgages.

Don’t rush. Try to save up for longer and save a bit more. Mortgage lending is calculated on risk, and one way to reduce that is to put down a larger deposit. Saving for longer could increase your chances.

Your application will need to be accompanied by the necessary number of years worth of accounts. Research lenders – most require at least two, if not three years. And they need to be prepared by a suitably qualified accountant. You will need your accountant’s certificate, or SA302, and accompanying tax overview documents, which you can get from HMRC.

To maximise your chances of getting a decent mortgage rate, you ideally want your company turnover and profits to be consistent or increasing. If they’re not, it may pay to hold off and reconsider applying for a loan when things are more stable or buoyant.

Make sure both your business and personal bank accounts are in the best shape because you may be required to present both to potential lenders.

Keep an eye on your credit score. A healthy one will mean you get offered the best deals.

It may be wise to think twice about switching your company type – say from a sole trader to limited company – before applying for a mortgage as it could get in the way of your application.

As a business owner, you should be aware of what is being said about your business on social media. Lenders now Google applicants, and anything negative could result in rejection.