Being self-employed shouldn’t prevent you getting a mortgage, but it makes the process different.

How Self-Employed Income is Assessed

Minimum Trading History – Most lenders require at least two years. Some accept one year.

Accountant-Prepared Figures – Carry more weight than self-prepared accounts.

Tax Returns (SA302s) – HMRC calculations provide verified income figures.

Tax Year Overviews – Confirm tax position matches what you paid.

What Counts as Income?

Sole Traders – Net profit on tax return.

Partnerships – Your share of partnership profit.

Limited Company Directors – Varies hugely. Some use salary plus dividends. Some include retained profits. Lender choice significantly impacts borrowing capacity.

Common Challenges

Variable Income – Lenders typically average, which helps if last year was poor.

Business Expenses – Minimising tax reduces mortgage affordability.

Retained Profits – Some lenders count them, some don’t.

Recent Growth – Finding lenders using latest-year figures maximises capacity.

Preparing Your Application

Gather two to three years’ tax calculations and overviews, accounts if prepared, business bank statements, and proof of upcoming work.

Review your tax position from a lender’s perspective. Consider timing if this year will be significantly better.

Finding the Right Lender

Criteria vary enormously. A broker familiar with self-employed lending identifies suitable lenders and avoids damaging rejections.

Contractor Mortgages

Some lenders calculate annual equivalent from day rates. Contract evidence can support applications. Specialist products exist.

Improving Your Position

Maintain clean accounts, balance tax efficiency with borrowing capacity, build trading history, and preserve credit score.

Talk to Specialists

SJ Financial Solutions regularly helps self-employed clients. Contact us to discuss your requirements.