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Mortgage
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Mortgages
for the Self-Employed
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How much can you borrow?
This
depends on how much you earn and how much the property you
want to buy is worth.
Most lenders will loan up to 75% of the
property's value and many will go to 90 or 95%.
However some will let you have up to 100% - but you'll pay over the odds for this and will probably be forced to buy mortgage indemnity insurance (bad).
A few will even lend more than 100% but special rules will apply.
Here's a secret: Assuming you have a regular income and clean credit history you're likely to get a loan fairly easily. Despite the impression you may be given that you've got to jump through the hoops, the competition between lenders to get your business is fierce.
The amount you can borrow will vary between lenders but the rule of thumb is three times your annual earnings. However typical variations would include:
Couple 1: two and a half times both annual incomes
Couple 2: three to three and a half times the greater income plus one year of the second income.
Check out our calculator, either now or later, to see how much you can borrow.
Some
lenders now use more sophisticated credit rating methods, where
they examine your income and your outgoings. The idea is that every borrower
has unique circumstances. Someone with teenage children and high outgoings
can't afford to borrow as much as a singleton earning the same salary.
Sometimes people are lent five times income.
Depending
on the area you want to buy in, the lender may refuse a loan
eg if they feel the property isn't expensive enough for the
area. More usually, it's the opposite case - where a property
is seen as too expensive.
Note that how much you can borrow is not necessarily
what you can afford
You may be able get a mortgage which stretches your budget to the limit but leaves you in trouble when you have to pay the other costs involved in buying your home and its future running costs
Some lenders will want to estimate this by checking your average outgoings eg your household bills, any debts etc. Some will get you to fill in a detailed questionnaire either by hand or on the phone or online etc.
Read more about What can you afford when buying your home
If you're a first time buyer it will always help if you can show you've been paying regular rent for a similar amount to what your intended mortgage payments will be.
To read more on this subject please see the list below or your mortgage guide or your home buying guide
Read enough? Just want a quote? To get your best mortgage quote quickly and easily we can put you in contact with a recommended mortgage adviser. It's free, completely confidential and there's no obligation at all. Simply fill out the form below
Read On
Self Employed: Where
do you stand?
How much
can the self employed borrow?
How do the self
employed prove their income?
Tax: Hoist
with your own petard?
Which type of
mortgage
Self
Certification Mortgages
How to apply
Read On / Mortgage Guide
How
to Choose your Mortgage
Types of Mortgage
Remortgages
Where to Find Your Mortgage
Getting
a Mortgage in Principle
Read On
Guide to Home Buying in the UK
UK Home and Mortgage Insurance
Read on about Mortages and being Self-Employed
or
See full contents of How to get a Mortgage
or
See contents of Home Buyers Guide
or
I've read enough for now and want to get a free Quick Mortgage Quote
Self Employed: Where
do you stand?
How
much can the self employed borrow?
How
do the self employed prove their income?
Tax: Hoist
with your own petard?
Which type of
mortgage
Self
Certification Mortgages
How to apply
Contact a Self-Employed Specialist Adviser Here
How to get a Mortgage
The full guide on how to get a mortgage with special tips
I'm
buying my first mortgage -
shortcut
I've
got a bad credit history -
shortcut
Mortgage
Basics
How
to Choose your Mortgage
Types of Mortgage
Where to Find Your Mortgage
Getting a Mortgage in Principle
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