Secure The Best Deal On Your Mortgage As A Freelancer

Securing the best deal on your mortgage as a freelancer can be difficult but not impossible. The problem usually lies in proving your self-employed income to your mortgage lender.

In many cases, the earnings of a freelancer can vary from month to month and your job security can be questionable. These factors can make mortgage lenders nervous however, don’t be discouraged all you need is evidence to prove your earnings.

Many lenders are happy to give mortgages to self-employed workers or freelancers if you have been trading for more than three years and have two years of tax returns and business accounts to prove income. If you are a freelancer and thinking about getting a mortgage soon but haven’t been trading for long enough then it is better to wait so you can provide the evidence required.

Some lenders prefer that freelancers or self-employed individuals have larger deposits before they consider lending them the money. This isn’t always the case as some lenders look to see future profit projections to ensure that you can afford the repayments now and in years to come.

Another thing to consider is that you should make sure all your accounts are in order and tax returns are up-to-date and in good order, as the lender will need to see this evidence before considering you for a mortgage. The Halifax announced on the 5th October 2022 that to comply with their policy the most recent tax calculations (SA302s) and corresponding tax year overviews need to be no more than 18 months old and that the latest tax calculations and tax year overviews for applications submitted from 6th October 2022 must be from tax year 2021 / 2022.

What is your self-employed status?

How would you classify yourself as a self-employed worker because your lender might be interested. For example, do you class yourself as a sole trader, contractor or freelancer or director of a limited company. Whilst the most common is freelancer or contractor, you might actually be a sole trader or even a company director.

If you are thinking about going freelance and would like to get a mortgage in the future than you might like to think about your timing. If you would like to get a mortgage in the next year, it might be more beneficial to stay in full-time employment until your mortgage has gone through. This would make the process of applying for a mortgage much easier and the chances of you being accepted more straightforward.

If you do decide to go self-employed now, you might have to wait three years before you can apply for a mortgage so you have enough evidence to prove your earnings.

Read our latest case study about self-employed looking for a mortgage here.

If you need advice about applying for a mortgage and would like us to look at some mortgage deals available that suit your circumstances then please get in touch.

*Please note: Your home maybe repossessed if you do not keep up repayments on your mortgage.

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