Self-employed man looks at laptop

Getting Proof of Income – Self-Employed Mortgages

Since the new year our refocus on self-employed individuals and their mortgages has really taken off, we’re helping so many people find the mortgage/s they need to suit their circumstances whether re-mortgaging, purchasing, buy to let or even using a large portfolio of properties as security against an existing mortgage when there is no guaranteed income.

The Owner and Founder of Active Brokers, Gary Das is a limited company director and our advisers work on a self-employed sole trader basis, so they have first hand experience being self-employed and know exactly how to help you find the right mortgage.

Unfortunately with the end of self-cert mortgages, income must be proven with all lenders (unless it is a buy to let mortgage). You get the very same mortgage you just have to jump through more hoops. We are here to give the advice you need, we think outside the box often speaking with accountants prior to the finalising of accounts. Scroll down to find out more.

Many people who approach Active Brokers looking for self-employed mortgages are asking how many years proof of income or trading they need to get a mortgage when they are self-employed.

If you don’t have time to talk over the phone 0800 028 4268 try our live online messaging service (bottom left) from 9.00 – 6.00pm, or email info@activebrokers.co.uk

How Many Years Proof Do I Need?

Most lenders will ask for 3 years proof of income to get your mortgage, however Active Brokers have access to the entire market, meaning that we could potentially get you a mortgage with only 1 years proof of income, this is of course dependant on your circumstances

By one year we mean one full years trading accountants, i.e. beginning and ending on the same month 12 months later.

Types of Income Proof

SA302 Forms – you can request this from HMRC for free, you’ll just need to call up with your national insurance number and tax code. Ask for SA302 forms for the last 3 tax years. This is the easiest and default way of proving your income when you are self-employed as a sole trader or partnership or if you have multiple streams of income i.e. employed and land/property (buy to let houses). You can also download these from the HMRC website and they will be required along with the tax overviews.

The following can potentially help with proving your income and getting your mortgage:

Have accounts up to date, using an accountant means that you employ someone to manage your accounts for you. Some lenders may insist that your accountant must be chartered or certified.

Don’t reduce your taxable income so much each year! While this might save you paying some tax at the time, it means that in the eyes of the lender you will be earning less – you need to come across as earning a reasonable amount, enough to afford your desired mortgage.

How do I get a Self-Employed Mortgage?

You will need a variety of documents and criteria to apply for a mortgage, not just to prove your income. It would be wise to make sure you have these available before you start the process, it can really save some time further down the line.

self-employed mortgages money houses

The more reliable income you can prove to the lender, the better your chances of getting the mortgage you desire.

Good Deposit – having a good deposit ready for your mortgage is required for many people, whether they are self-employed or not. The good news is you can get a mortgage with as little as 5% deposit, but 10% or even 15% will see you getting lower interest rates and your chances of acceptance at 90% and below with any lender will increase.

Good Credit History – a clean credit score or history will help the lenders to see that you are reliable historically. Make sure that your personal credit history and business credit history are looking as best as they possibly can, get any late or unpaid debts sorted as soon as possible.

Records of Regular Work – having good records of consistent, regular work that pays you as it should, can really show to the lenders that you are earning enough to afford a mortgage AND that you can consistently earn enough in the future to afford the mortgage in years to come.

Talk to Active Brokers, our specialised advisers can help you find your self-employed mortgage. We handle all the paperwork and application for you, furthermore, Active Brokers are here to help you with ALL your financial needs, from insurance to mortgages we can find you the cover and you can be sure you’re getting the right advice for you.

All in all, getting a self-employed mortgage means that while you do get the same interest rates as everyone else, you just have to jump through a lot more hoops to get there. Best leave it to the experts.

Why you should always try first

Quite frankly Gary doesn’t like saying no to anyone, especially self-employed individuals, he and the team will go to great lengths to make sure you can get the mortgage with the lowest interest rates and in the quickest possible time (to reduce your stress levels if you’re buying). Ever scenario is different and where there is a will there is a way, we are professionals, we think outside the box and work with you and your accountants to make sure you aren’t disappointed.

It’s always worth checking with the experts if you’re unsure: Active Brokers won’t charge you prior to submission of an application so we do a lot of work for no charge. We won’t give you false hope as long as you are open and honest with us.  Please gives us a try, what do you have to lose? This is why there’s no harm in trying with Active Brokers, we will always try our hardest to get you the rates you need as a self-employed individual.

Find out more here about how to get a quote or discuss your options with an adviser.

 

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