Self-employed mortgages are notoriously difficult to get from traditional banks. Over the years, they have been more open to the fact that clients working conditions and requirements have changed over time, as the Employers change working patterns and include zero hour contracts.
A Self-employed mortgage is a type of mortgage that is given to a client who works as a Contractor for another company, or as a Director for themselves. The difference between this and Employed, is that the Employee pays taxes at the end of the year, rather than PAYE (Pay as you earn), where your taxes are taken out each month. From a lending point of view, its harder for banks to understand what your business is paying you in "real time", so they assess your Tax Returns at the end of the year over 2-3 years, depending on the bank. This average is divided by the number of years.
What documents will I need?
SA302 - Tax Returns and Tax Calculation
Accounts of the company (Audited)
Company Bank Statements
Personal Bank Statements
Personal Guarantees (Not all Lenders)
What if I only have 1 years accounts?
If you have just started in business, traditional banks would not always lend. Most Lenders would let you borrow once you completed your second years of accounts, so they can see the trend of your business. so you would have to ask the Broker to contact a "specialist Lender", who might be able to help. Specialist Lenders are banks and lenders who let client's with "unusual circumstances" borrow on slightly higher rates, due to the "risk" associated with the customer. These circumstances are not always bad, but nist considered higher risk.
For example:
A client with more than 4 properties
A client who has a few missed payments on their mortgage
A client who needs to purchase a freehold block of flats
A client who wants to borrow more than 80% of the property value (PV).
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