The Self Employed

Being self employed and looking for your mortgage partner can be a daunting prospect, how do you know your lender is into you, are they the right match or will they spurn your advances?

Whether you are a sole trader, self employed within a partnership and particularly if you are a Limited Company or a shareholding director within one then different lenders can take very different approaches to granting you a mortgage.

Without knowing which mortgage lenders are best for you it can make the whole process very difficult, this is where having the best matchmaker comes into play.

Taxable income is king but what does that mean? Some somewhat harsh banks will only use the lower of your last 2 years declared income regardless of how well you are doing right now, whereas some will average the last 2 years declared income. Helpfully, some lenders will use your latest years income if you are doing better but not if it has jumped up too much. But how much is too much more income now that your business is booming?

When you are a Limited Company it is even more difficult to know. Some will use your directors salary and add your dividend income in which is nice, but will that be the average of the last 2 years or your latest years figure? Its all in play. If you are a minority shareholder but get paid on a salary and dividend model will the bank use all of your income? Some will ignore your declared dividend completely and use your share of the company profit, but will that be the company profit before or after taxation? Will that be the latest year figure or will they average it out?

Did the pandemic impact your profits but is your EBITDA on the rise?

Regardless of whether you are looking to buy your first home or if you are moving home, if you are looking to change your mortgage lender to get a new deal or looking to borrow more to consolidate your outgoings or to carry out some home improvements, navigating all these options to secure the best possible outcome is key. The differences between how banks treat self employed customers are huge and impactful.

If you are Self Employed then you are probably too busy already, Haus Advisory have worked closely with leading accountants for years and are self employed experts. A mortgage is often a long term commitment and not unlike a matchmaker we will make sure you are paired with the best possible match.

(if it’s an exciting short term fling you are looking for we also offer bridging finance)