How To Secure A Mortgage As A Self-Employed Professional

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August 09, 2016

Building a life for yourself includes a couple of definitive milestones, making the leap to a secure and happy future that’ll leave your children and grandchildren with a legacy. As a freelancer or contractor, you’ve got an idea of the extra push it’ll take to get what matters – all of it is down to you, and how you sell and manage yourself.

Mortgages are the key to owning your own home, yet the self-employed workforce has to undergo more rigorous assessment than your typical employee to get them. There are, however, steps you can take to secure a mortgage application, so let us walk you through the basics.

The housing pickle

First-time buyers often set their heart on a dream property without realising the amount of critique they’ll undergo before someone hands them the keys. When applying for a mortgage, a bank will want to have the highest possible degree of certainty that you can afford repayments; they’ll factor in your income, outgoing bills, and credit history to validate how capable your finances are.

Everyone has to submit the right paperwork, but self-employed people are under closer scrutiny, as you’ll need to send in your accounts too. Banks will scour applications for the slightest inconsistency or chink of bad evidence before they give you the go-ahead. The crucial form is HMRC’s SA302, which gathers tax declarations from previous years.

How to prepare

Since mortgages can take a while to be approved, you should take some time to seriously interrogate how much you’re earning, and what you can realistically afford. Drawing all the relevant documents together will be for nothing if your estimations are far outside what the bank deems realistic for the income and business model you’re captaining.

Once you have a solid idea of this, get your bookkeeping in order. Three years translates as a significant amount of supportive evidence to organise: those stray receipts and bank statements can affect the end decision if they aren’t fully accounted for.

If you don’t have an accountant, or you’re unsatisfied with your current provider, Bright Ideas Accountancy is the balm to your troubles. We can help you prep for a seamless mortgage application, complete with a reference from our team. That’s less stress on your shoulders, freeing you up to actually find the perfect home within your price range.

Cementing your dreams

Despite the best most   assured level of foresight, you may still be left in a stream of cash without a paddle, as a housing purchase falls through and you have to reapply for a mortgage with another price tag. Bright Ideas can help you make multiple applications in the same year, so you don’t have to worry about unforeseen circumstances crashing your party.

Have a peek at our tailored accounting packages to see what suits you. Alternatively, for any other mortgage-related accounts advice, call our team to discover how we get contractors, freelancers and sole traders ever closer to bricks and mortar they can call their own.

hand real estate agent holding holds a key with a tag in the form of homes


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