Self Employed Mortgages

Tailored Solutions for Your Unique Situation
It’s surprising how often we speak with self-employed people who think that owning a business or working for themselves means they are unable or unlikely to obtain a mortgage. The truth is that lenders are all too aware of the particular situation for self-employed people and have a pretty straightforward process in place to work out how much they would be prepared to lend.

Whether you are a sole trader, a partner, or a company director, there is a process by which you can obtain a mortgage. In the case of sole traders and partners, the main criteria considered is the individual’s net profits while for company directors, it’s their salary and paid dividends that are looked at. Some lenders are aware that many business owners will not be drawing all of the money they are entitled to from the business and so will also accept the applicant’s share of net profits and salary.

Lenders will vary in the amount of time it is expected an applicant will have to provide evidence of income for. Most will look at the income received over the last two or three tax years and either average it out or take the most recent year as a basis for calculation. However, if you have a good profile, some lenders will make it possible to get a loan with just one year’s set of accounts (completed tax return).

Many self-employed people who work on a freelance basis often have income from various different sources. Freelance musicians, for instance, will be paid on a self-employed basis for much of their work but some of their teaching work will be on a PAYE basis with their income being taxed at source. This latter income will show differently on your SA302 form but with good justification and clear presentation, it will be treated no differently and should still contribute to your income for the year.

The main documentation to prove your income is either an accountant’s reference or your SA302 form showing your tax calculations from HMRC. In the case of the accountant’s reference, then it must be a qualified accountant, and different lenders will require different levels of qualification. Obtaining your SA302 tax calculations from HMRC is by far the most common process and in reality is quite easy. It can be downloaded from the HMRC portal. They can also post them to you if you request them to do so, although this usually means a wait of about ten days.

points to consider for the self-employed

You will need:


Your income will be assessed depending on your self-employed setup. If you leave money in the company, using your share of net profits might significantly increase your borrowing potential.


Self-employed individuals working on fixed-term contracts may benefit from unique considerations tailored to their specific situation.


Although most lenders typically require a minimum of two years of self-employment, there are options available for individuals with just one full year of self-employment.


Engaging a qualified accountant can enhance your ability to obtain a mortgage, as they can provide explanations for complex income situations to support your application.

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At Barrett Mortgages, we understand that everyone’s financial situation and goals are unique. That’s why we offer customised mortgage solutions