How to Find the Best Mortgage Lenders for the Self-Employed

Self-employed and looking for the best mortgage lenders? Read our in-depth guide to find out everything you need to know.

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Pete Mugleston

Author: Pete Mugleston - Mortgage Expert

Updated: December 15, 2021

Finding the right mortgage lenders who understand all the complexities involved with being self-employed can be a difficult, time consuming, task. By following this guide you’ll be able to make a much more informed choice, giving your application the best chance of success.

How to choose the right lender if you’re self-employed

Ideally you’ll need to find a mortgage lender who specialises in providing loans for self-employed applicants, fully understands their needs and is best positioned to offer you a mortgage that fits in with the way you trade and exactly how you make your money.

Adopting a scattergun approach and applying to as many lenders as possible in search of the right one rarely, if ever, works out the way you want it to. It will take up far too much of your time, away from your business and could end up causing more harm than good, particularly to your credit record.

Using online tools such as digital rates tables isn’t a great alternative, since they’re rarely whole-of-market and often give prominent placement to sponsored mortgage deals.

The way to choose the right lender for you is to have a professional find one for you. There are brokers who specialise in mortgages for the self-employed and they can save you a lot of time and money by matching you with the lender who’s best placed to offer you a great deal.

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Which lenders best cater for self-employed borrowers?

There’s no one-size-fits-all answer here as the best lender for you might be a poor fit for another self-employed professional who trades in a totally different way.

Whilst all mortgage lenders work to the similar rules, they don’t all use the same eligibility criteria. This means that one lender may look more favourably on your application than another, depending on what their criteria guidelines will allow.

The table below, looking at what certain lenders will consider as evidence of earnings, provides a great illustration of this…

Mortgage Provider Net profits (sole traders and partnerships) Company directors – salary and dividends Company directors – salary and retained profits Will consider applicants who have used SEISS grant money
Accord Mortgages Yes, with accountant reference or last 3 years SA302s Yes, with accountant reference No Yes
Barclays Yes, with 2 years certified accounts and SA302s Yes, with 2 years certified accounts and SA302s Yes, will use last 2 years average share of net profits after corporation tax Yes.
HSBC Bank Yes, with 2 years SA302s and 3 months bank statements No Yes, will use last 2 years average share of net profits after corporation tax No
Natwest Yes, will use last 2 years accounts for profit average Yes, will use last 2 years’ average salary and dividends. Must own min. 20% share in business. No Yes.
The SEISS grant must not have been taken within 3 months of submitting application.
Santander Yes, with accountant reference and 2 years SA302s if LTV > 75%, 3 years if > 90%. Yes, with accountant reference. Must own min. 20% share in business. No Yes.
Nationwide Yes, with accountant reference and 2 years’ certified accounts Yes, will use last 2 years’ average salary and dividends. Accountant reference also required. No Yes.
Virgin Money Yes, with last 2 years certified accounts No Yes, will use last 2 years accounts – must show a profit during this period. Yes. SEISS grant money can’t be included for affordability assessment.

So, for example, if you’re a company director and take a modest salary in order to retain more profits in your business, there’s really no point applying to NatWest or Santander but HSBC and Barclays would take these earnings into account.

This is definitely where having someone with the right experience by your side can give you a huge advantage, saving you so much time which can be spent looking after your business while your broker takes care of your mortgage application.

What are the benefits of specialist lenders if you’re self-employed?

Specialist lenders who cater specifically for self-employed people might be more likely to offer you a mortgage under niche circumstances, including…

  • If you have less than two years’ accounts
  • You want to borrow based on your most recent year of trading only
  • You have declining profits
  • You want to borrow based on retained profits
  • You have bad credit

The take-home point to keep in mind about specialist lenders is that many of them are not banks and building societies you’re likely to have heard of, nor will you find them through a quick Google search.

Many of them are only approachable through a broker and reserve their best deals for borrowers who apply through a mortgage advisor.

Are there lenders who offer mortgages without any proof of income?

This hasn’t been possible since 2014 when the final self-cert mortgages were withdrawn from the UK market, but there are close alternatives to consider.

Self-certification mortgages may no longer be available but, thankfully, there are some specialist lenders who’ve stepped into this void and can provide assistance with the right experience and knowledge of dealing with a range of circumstances, such as:

  • Company directors with accounts showing a loss
  • Self-employed with only a certain number of years’ accounts
  • Contractor mortgages
  • Business owners with a bad credit record

If you’re unable to provide any proof of income, or if you think there may be other factors that could hamper your chances of being approved – don’t panic! Just speak with your mortgage broker and explain the situation. They’ll then be able to search for a specialist lender with experience dealing with specific scenarios such as yours.

How a mortgage broker can find the best lender for you

If you’re self-employed, many lenders might look at your application but what you need is the right lender who offers the best chance of getting the mortgage you need. This is where we can help.

We understand that every self-employed person has a different story to tell, with different income streams which don’t follow the straight line of a salaried employee. By matching you with a broker who has the right skill-set and expertise, you’ll find the lender you need.

Call 0808 189 0463 or make an enquiry and we can arrange a free, no-obligation call with a mortgage broker with experience in assisting self-employed people today.

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Pete Mugleston

Pete Mugleston

Mortgage Expert

About the author

Pete, an expert in all things mortgages, cut his teeth right in the middle of the credit crunch. With plenty of people needing help and few mortgage providers lending, Pete found great success in going the extra mile to find mortgages for people whom many others considered lost causes. The experience he gained, coupled with his love of helping people reach their goals, led him to establish Online Mortgage Advisor, with one clear vision – to help as many customers as possible get the right advice, regardless of need or background.

Pete’s presence in the industry as the ‘go-to’ for specialist finance continues to grow, and he is regularly cited in and writes for both local and national press, as well as trade publications, with a regular column in Mortgage Introducer and being the exclusive mortgage expert for LOVEMoney. Pete also writes for OMA of course!

FCA Disclaimer

*Based on our research, the content contained in this article is accurate as of the most recent time of writing. Lender criteria and policies change regularly so speak to one of the advisors we work with to confirm the most accurate up to date information. The information on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisors working with us are fully qualified to provide mortgage advice and work only for firms that are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs.

Some types of buy to let mortgages are not regulated by the FCA. Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.

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