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
No impact on your credit score
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.
The following topics are covered below...
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 do I get a mortgage if I’m self-employed?
- Which lenders will look at my application?
- What evidence of my earnings do I need?
- 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.
Speak to a self-employment expert
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||
|Partnership||Each partner’s percentage share of the net profits||
|Limited Company Director||Salary plus dividend income
Salary and retained profits
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!
Amazing! We had been led on and eventually turned down by 2 other reputable brokers.
These guys got us a DIP within half an hour!!! My husband and I both have bad credit, I’m furloughe...
Rob was amazing getting me and my wife a mortgage. Being turned down by other lender due to me being a limited company.
Rob was great at keeping us informed as to progress and anything we ne...
I would recommend this company, the service was excellent!
I really would recommend this company, the service was excellent! Got my mortgage in principal very quickly, and this was with complexities of self employment.
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.
Speak to a self-employment expert
Remortgaging When You’re Self-Employed
Getting a Mortgage Through the Construction Industry Scheme
How to Find the Best Mortgage Lenders for the Self-Employed
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!