In many cases, the mortgage options available if you are self-employed may be quite similar to those on offer to other borrowers. It is not always necessary to use a specialist lender, because mainstream lenders also lend to those who run their own businesses, although they may ask for a larger deposit than usual.
One type of loan, known as a self-certification mortgage, used to be commonly used by those who ran their own businesses, but this was removed because of abuse by borrowers and lenders.
Although the self-employed should, in theory, be able to take out the same mortgages as everyone else, you may find that difficulties arise when you are asked to prove your income. Self-employed people with existing mortgages or with large amounts of savings will typically be able to get a better deal.
When it comes to proving your income, having two years of business accounts available is essential. In some cases, three years may be needed. Evidence of future work may also be required by lenders. Problems may crop up due to the fact that accountants usually try to represent your income with as low a figure as possible in order to minimise any tax bills, but a higher income is more persuasive when you are applying for a mortgage.
It can be tricky for anyone to find the right mortgage and, particularly if you are self-employed, it makes sense to obtain advice from a professional who has completed a CeMAP training course in order to maximise your chances of getting the loan you need