A UK website devoted to businesses has some advice for self-employed landlords trying to get a mortgage to buy a rental property (known in the UK as buy to let). The website states that it is more difficult to get a loan from a bank if the borrower is self-employed. The bank will need specific pieces of information, listed in the account. Or the borrower can use a broker, or try to get a special loan (not available in the UK), called a self cert. This is a loan in which the lender takes the borrower’s word about their income.
- People who are self-employed need to be very careful keeping track of paperwork. When securing a mortgage, those that are self-employed need to supply more paperwork than regular employees.
- A mortgage broker or advisor who specializes in but-to-let may be preferable to a bank. The specialists are more likely to approve the loan and know more of the subject.
- Be very careful of taking on more of a loan than can be repaid. Do not overestimate future income for the sake of a loan. Have 3 years worth of business records.
“Lenders will often require the self-employed to jump through a number of hoops before offering a mortgage, and that may mean the process is a little tricker than if you were employed.”
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