30 May 2023

Self-employed mortgages - Is it possible?

By Stafford Railway Building Society

As more and more people turn to self-employment as a career choice, the need for mortgage options tailored to this group of borrowers has grown. Self-employed individuals often face unique challenges when it comes to securing a mortgage, including fluctuating income, limited credit history, and difficulty providing the necessary documentation to prove income.

However, the good news is that there are now a variety of mortgage options available specifically for self-employed borrowers. These mortgages consider the unique circumstances of self-employment and provide flexible lending criteria to help these individuals secure the financing they need to purchase a home.

One type of mortgage available to self-employed borrowers is the "bank statement mortgage." This type of mortgage allows borrowers to provide bank statements as proof of income instead of traditional income documentation, such as tax returns or pay stubs. This can be particularly helpful for self-employed individuals who may have irregular income or difficulty providing traditional income documentation.

Another option is the "stated income" mortgage, which allows borrowers to state their income without providing any supporting documentation. While this type of mortgage can be easier to qualify for, it typically comes with higher interest rates and fees.

Self-employed borrowers may also benefit from working with a mortgage broker who specialises in this type of lending. These brokers can help borrowers navigate the lending process, find the best mortgage options, and provide guidance on how to improve their chances of approval.

Overall, self-employed borrowers have more options than ever before when it comes to securing a mortgage. With flexible lending criteria and a variety of mortgage products available (for instance we only manual underwrite and accept latest years, net profits and welcome newly qualified professionals who can use 1yrs accounts), it's possible for self-employed individuals to achieve their dream of homeownership.

For adviser use only. Please note this content has been supplied by our lender partner and as such, is their responsibility. No party shall have any right of action against Legal & General in relation to the accuracy or completeness of the information in this article.