Documents Needed for a Self-Employed Mortgage

Successfully getting a self-employed Mortgage is all about proving you meet the lender’s criteria. As long as you have good mortgage advice and the right documents ready, it should be straightforward to get mortgage approval. 

Why do I need to prove my income for a self-employed mortgage?

For any mortgage, a lender needs to be certain that you can comfortably afford the repayments. For the self-employed, this can be a little harder to gauge, as your income can vary month to month and year to year.

Lenders usually want to see a couple of years’ worth of records to understand what your annual income is, and will compare that with your spending. Your income is an important factor in how they calculate how much to lend you.

What documentation will I need?

The documents you need as proof of income can vary by lender, and depending on your business set-up. Generally, though, for the mortgage application you will need

• Proof of ID – passport and driving licence
• Proof of address – a recent utility bill
• Bank statements
• Tax assessments or tax returns for the last two to three tax years – previously called SA302 forms

How will my income be assessed?

If you’re a Sole Trader, the lender will usually base your application on the income stated on your annual tax return. In a Partnership, lenders look at your share of the net profit from the business.

If you run a Limited Company, it’s even more important to seek mortgage advice. If you take a basic salary from the business to reduce your tax, you may need to find a lender that will accept salary, dividends and retained profits. Otherwise your borrowing could be limited.

How do you improve your chances of being accepted by a lender?

Getting mortgage approval is all about meeting a lender’s criteria – so the most important step is to find the right lender for your situation. This is where a Mortgage Broker can save you hours of research.

Generally, self-employed workers are eligible for most mortgages. You will have the best choice of lenders if you have a good credit score, have been in business for at least two years and have a deposit of 10% or more.

How can Mortgage Advice Centre help me prepare my documents for a self-employed mortgage?

Our Mortgage Advisers are here to support you all the way through your mortgage journey. We’ll explore your situation, match you up with a potential lender and get you an Agreement in Principle.

We will guide you through applying for a mortgage and make sure you know which documents you need and when.

We’re here to answer your questions and assist at every step of the process. Contact us today to find out how we can help you.