Specialist mortgage solutions for business owners, contractors, freelancers, and self-employed professionals. We understand your unique income situation and can help you secure the right mortgage.
Securing a mortgage when you're self-employed requires careful preparation and presentation of your finances. Here's our step-by-step approach to helping you get the right mortgage:
Gather your business accounts, SA302 forms, tax year overviews and bank statements.
We'll review your financial situation, discuss your mortgage needs, and provide an indication of what might be possible.
We'll search the market for lenders who specialise in self-employed mortgages and match your specific circumstances.
We'll help you complete the application, prepare a strong case for the lender, and submit all required documentation.
The lender will arrange a valuation of the property to ensure it provides adequate security for the loan.
Once approved, you'll receive a formal mortgage offer. We'll liaise with your solicitor to ensure a smooth completion process.
Being self-employed doesn't mean you can't get a mortgage. While the application process may be more complex than for those in traditional employment, many lenders offer specialist mortgage products designed specifically for self-employed individuals.
We're based at Beehive Works in Sheffield, in a city where self-employment runs deep - from creative studios around Kelham Island to tradespeople and contractors across South Yorkshire. We support self-employed clients the same way whether you're local to Sheffield or getting in touch from anywhere else in the UK.
Self-employed mortgages are suitable for various professionals, including:
Lenders typically assess self-employed income through:
The main difference lies in how lenders assess your income. While employed applicants can simply provide payslips, self-employed individuals need to demonstrate a stable income through business accounts and tax returns. Lenders may also look at:
Despite these differences, self-employed applicants can still access competitive rates and a wide range of mortgage products with the right approach and expert guidance.
Self-employed mortgage applicants face unique challenges, but with the right approach and expert guidance, these can be overcome. Here are some common obstacles and how we help our clients address them:
Self-employed income often varies month to month or seasonally, making it harder to demonstrate stability to lenders.
We can help you present your income in the most favorable light, focusing on averages and trends rather than monthly fluctuations. Some lenders will consider your latest year's figures if they show growth.
Many lenders prefer to see at least 2-3 years of accounts, which can be challenging for newly self-employed individuals.
We work with specialist lenders who consider applications from those with just 1 year of accounts, and in some cases, can find solutions for those with only 6 months of self-employment.
Minimising taxable income through legitimate deductions can reduce the income figure lenders use to calculate how much you can borrow.
We understand this balance and can introduce you to lenders who take a more holistic view, considering retained profits, dividends, or using different income calculation methods.
Multiple income streams, director's loans, dividends, and salary combinations can be difficult for mainstream lenders to assess.
Our expertise in self-employed mortgages means we can match you with lenders who understand complex income structures and have flexible assessment criteria.
Self-employed applicants typically need to provide more paperwork than employed borrowers.
We'll guide you through exactly what documentation you need and help you prepare a comprehensive application package that addresses potential lender concerns upfront.
Changing from sole trader to limited company (or vice versa) can create complications with income verification.
We can find lenders who will consider your combined trading history across different business structures, rather than starting the clock again when you change.
We understand that self-employment comes in many forms, each with unique income structures and documentation. Our expertise covers all types of self-employed professionals:
As a sole trader, lenders typically assess your income based on your net profit as declared on your tax returns. Most lenders will look at your average income over 2-3 years, though some will consider just your most recent year if it shows growth.
If you're a director of your own limited company, lenders may consider your salary, dividends, or a combination of both. Some specialist lenders will also consider retained profits within the business when assessing affordability.
Contractors can often have their income assessed based on their day rate rather than annual accounts. This can be advantageous, as lenders may calculate your annual income by multiplying your day rate by the number of working days in a year.
For those in business partnerships, lenders will typically look at your share of the profits as shown on your tax returns. The assessment process is similar to that for sole traders, focusing on your individual income rather than the business as a whole.
If you have multiple sources of self-employed income, we can help you find lenders who will consider your combined income across different businesses or roles, strengthening your mortgage application.
While most lenders prefer to see at least 2-3 years of accounts, we work with specialist lenders who can consider applications from those with just 1 year of trading history, and in some cases, even less.
At Friends Capital, we specialise in finding mortgage solutions for self-employed professionals. Our expertise and lender relationships allow us to overcome the common challenges faced by self-employed applicants. We can provide:
With our specialised knowledge of self-employed mortgages and whole-of-market access, we can help you navigate the complexities of self-employed mortgage applications and secure the right mortgage for your needs, often when mainstream lenders have said no.
Get answers to common questions about self-employed mortgages.
How long do I need to be self-employed to get a mortgage?
Most mainstream lenders prefer to see at least 2-3 years of accounts, but there are specialist lenders who will consider applications with just 1 year of trading history. In some cases, if you have a strong track record in your industry before becoming self-employed, or have confirmed future contracts, we may be able to find solutions for those with even less trading history.
How much can I borrow as a self-employed person?
The amount you can borrow typically ranges from 4-5 times your annual income, similar to employed applicants. However, how lenders calculate your 'income' varies. For sole traders, it's usually your net profit. For company directors, it might be salary plus dividends, or some lenders may consider retained profits too. We'll help you find lenders who calculate your income in the most favorable way for your situation.
Will I need a larger deposit because I'm self-employed?
Not necessarily. Self-employed applicants can often access the same loan-to-value (LTV) ratios as employed borrowers, including 90% or even 95% mortgages with some lenders. However, if you have less than 2 years of accounts or other complexities, a larger deposit (20-25%) might improve your chances of approval and help you secure better rates.
I've been minimising my taxable income. Will this affect my mortgage application?
Yes, this is a common challenge. Legitimate tax planning can reduce your declared income, which in turn can limit how much you can borrow. However, we work with lenders who take a more holistic view of your finances. Some will consider retained profits in your business, use different income calculation methods, or look at your income before certain deductions. We'll help you find the right balance between tax efficiency and mortgage affordability.
What documents will I need for a self-employed mortgage application?
Typically, you'll need: 1) 1-3 years of certified accounts or SA302 tax calculations and tax year overviews from HMRC, 2) Business and personal bank statements (usually 3-6 months), 3) Proof of upcoming contracts or work (especially for contractors), 4) Standard identification and address verification documents, 5) Details of your outgoings and existing credit commitments. We'll provide a detailed checklist specific to your situation.
Will I pay higher interest rates as a self-employed borrower?
Not necessarily. If you have a good credit history, a decent deposit, and can demonstrate a stable income, you can often access the same competitive rates as employed borrowers. However, if you have less trading history or more complex circumstances, you might find that specialist lenders who are more flexible with self-employed applicants charge slightly higher rates. We'll always search the whole market to find you the most competitive rates available for your specific situation.
Our specialist advisers understand the unique challenges faced by self-employed professionals and can help you navigate the mortgage market with confidence.
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