Mortgages for Self Employed or Contractors
If you are self-employed or are a contractor, you may be concerned it could be more difficult to get a mortgage.
At Sterling Private Finance, we help clients from all walks of life but many are self- employed entrepreneur's or contractors, so we have extensive experience helping clients in these sectors. We use our expertise and over 20 years of experience to ensure we find the best solution that suits your needs.
If you are self employed either as a sole trader, partnership or limited company, a lot of lenders require at least two years accounts or tax returns, however some lenders can work with one years accounts. This is where our expertise, knowledge and experience are invaluable in find you the best solution.
If you are a company director, you may not need to draw all of the profits from the business, as you simply may not need all of the company profits to cover your day to day living expenses. Also drawing out all of your revenue would increase your tax liability.
A lot of lenders will base lending on what your directors salary is plus an dividends you take annually. However some lenders are able to base lending on your directors salary and net profits, usually based on a two year average.
As a contractor you will usually need to show you have history of contracting for at least 6 months, but some lenders will require a longer history going back 1-2 years. If your current contract is due to expire, lenders will usually want to see an extension or that you have a new contract in place.
If you are paid on a ‘day rate’ lenders often want you to have a contract for a set number of days per week. But they will often only take into account income over 46 or 48 weeks of the year.