Need help to get a mortgage?
Just because you are self-employed it shouldn’t be difficult to raise finance
There is lots of economic and other uncertainty in the world today. Nobody is too sure about where we are going and how things will end up. And in the meanwhile, you need to be able to plan financially. Maybe you want to move house and now is the time to arrange a mortgage.
Even though you may be self-employed / run your own business that should not be difficult to achieve. But there are stumbling blocks you need to see coming because the computer doesn’t always say “yes”:
- Banks (and other lenders) and their computers understand employees. You may earn far more than a permanent employee, but they have payslips! The man at the bank likes payslips and that coupled with a sensible deposit will normally mean a PAYE employee can get a mortgage offer fairly simply.
- You could be the next applicant, with a similar deposit to the last guy who was an employee. You earn a lot more than the employee, but you don’t have payslips – you have accounts. You can hear the sharp intake of breath. The computer doesn’t “get” self-employed.
So what are things you need to do practically to get a mortgage as a self-employed person/contractor:
- Plan early. As soon as you start thinking about moving or buying. It can do no harm to pop into your bank and start a dialogue and get an advisor “onside”. Make sure they understand what you are doing and explain why your work is not a short-term or risky thing. Let them put notes of the discussion on your record. If the advisor understands they can then explain away any risks as the loan request goes up the chain for approval. Even to a computer!
- Whether you are a contractor or working in your own business you will know others in a similar position. Talk to them. There will be other people out there who have gone through the same experience – so listen to what they have to say (within reason – don’t always trust the man in the pub!).
- You will have an accountant, financial adviser and maybe a lawyer. If not as advisors you will know people like these. Use them as they will know people who can help you. Recommendations are always useful and engender trust from both parties.
- Find a specialist mortgage advisor. You and others working self-employed / contract workers form a growing and very large part of the UK economy so there are mortgage advisors who specialise in obtaining finance for you. Your network can help put you in touch with someone you can trust.
- Make sure your accountants are geared up to helping you with references and can provide financial information promptly and as requested.
Work with your accountants to achieve what you need. There is a dichotomy. You may want to pay as little tax as possible. But organising your accounts tax efficiently may mean that you don’t demonstrate the profits needed to raise the loan you want. Think about this early and your accountants should be able to assist you.
For further advice existing clients email us at support@anytime.uk.com or call 03333 110 230
For new enquiries contact us now
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