Updated: December 16, 2021

How to Find the Right Mortgage Broker if You’re Self-Employed

Are you self-employed and wanting to speak with a mortgage broker? Read our guide for everything you need to know

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Pete Mugleston

Author: Pete Mugleston - Mortgage Expert

Updated: December 16, 2021

Finding the right broker can sometimes make all the difference between getting the mortgage you need or not, particularly if you’re self-employed. By following this guide you’ll have a better understanding of why a broker can be so crucial and how they can help give your application the best chance of success.

Why you need a mortgage broker if you’re self-employed

When you’re right at the beginning of the homebuying process, it’s highly likely you’ll have a whole host of questions swimming around in your head demanding answers, such as:

  • How much am I allowed to borrow?
  • What if I have a bad credit record?

There’s two routes you can take to find answers for all the questions you have: 

  • Do it yourself (the hard and time consuming route)
  • Speak with an experienced mortgage broker (the smart and quickest route)

If you’re self-employed, trying to find the best mortgage by yourself will cost you the one crucial commodity essential to your business’ success; time!

How to find the best mortgage broker

In a nutshell – speak to us! We understand that you shouldn’t have to settle for just any broker and hope they’ll be able to give you the right mortgage advice. First, we listen to what your exact needs and circumstances are, then we match you with an advisor who has the most appropriate expertise.

There’s a number of ways in which having the right mortgage broker on your side can be a huge advantage, such as:

  • Size of your deposit: Finding lenders who will look at your application based on how big a deposit you have available.
  • How much you can borrow: Helping you prepare your proof of income so you can get the mortgage you need.
  • Bad credit record: Providing advice on what you can do to improve your credit score and finding specialist lenders who will consider your application.
  • No proof of income or trading history: Can help prepare other evidence and source a specialist lender.
  • Small business owners/Contractors:  Can show you how to prepare your proof of income to boost your application.

In effect, the mortgage brokers we work with will manage your application from start to finish, whatever the circumstances.

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What are the key benefits of using a mortgage broker?

Here’s two key benefits where a mortgage advisor can add significant value, particularly if you’re self-employed.

1. Preparing your proof of income

For salaried employees, a lender can ask for copies of monthly payslips, employment contracts and P60s, all of which would be deemed sufficient proof of income. But, if you’re self-employed it’s not so straightforward because you won’t have any of these documents.

So, how will you be able to prove you can afford the mortgage repayments? Here’s a table providing a neat summary of how your income will be assessed and the supporting evidence you can use if you’re self-employed.

Self-employment status Affordability Assessment based on: Proof of Income required: Business Bank Statements required (typically 3-6 months):
Sole Trader Net profits
  • Certified accounts
  • SA302 statements from HMRC

OR

  • Tax year overview
Yes
Partnership Each partner’s percentage share of the net profits
  • Certified accounts
  • SA302 statements from HMRC

OR

  • Tax year overview
Yes
Limited Company Director Salary plus dividend income
OR
Salary and retained profits
  • Certified business accounts
  • SA302 statements from HMRC

OR

  • Tax year overview
  • Accountants reference
Yes

As you can see, there’s a big difference between how a lender assesses a self-employed applicant and an employee. The more evidence you can produce, the better chance you’ll have of success.

Looking at all the information here can seem quite daunting but don’t worry! You won’t have to do this on your own. An experienced broker would already know what evidence is needed and can help you prepare everything you need.

2. Finding the right lender

There’s a common misconception that all mortgage lenders work to the exact same guidelines, which isn’t quite the case. They do all work to the same rules, but their eligibility criteria can vary from lender to lender.

This means what one lender may accept another may not. So, in terms of your application, how do you find out which ones will and which ones won’t? The table in our article here provides a very practical illustration of this.

Using a mortgage broker’s knowledge and experience to identify the right lender for your circumstances, rather than approaching each one directly, will save you a lot of time, effort and potentially some money too!

What fees do brokers typically charge?

There’s usually three different ways a broker will look to be paid for their services:

  • A pre-agreed arrangement fee to a service you choose
  • A direct fee to the broker, usually between £500-£999
  • A percentage of the final mortgage amount

Not all brokers actually charge a fee and in many cases the charge can be tailored to how complex the situation is. Also, if your mortgage application is unsuccessful, you should not expect to have to pay a fee.

Get matched with a self-employed mortgage broker

If you’re self-employed, the best chance you have of finding the right mortgage lender is to first find a broker with the right skill-set and knowledge of dealing with similar applications on a daily basis. We know the mortgage brokers we work with all fit this description.

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

Ask a quick question

We can help! We know everyone's circumstances are different, that's why we work with mortgage brokers who are experts in Self Employed Mortgages. Ask us a question and we'll get the best expert to help.

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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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