Charles McDowell, Commercial Director, Mortgages at Aldermore

Mortgages for the self-employed

Recent research from Aldermore found that nearly two thirds (62%) of self-employed first time homebuyers do not know how they will get on the property ladder, and almost a third (32%) who have recently bought a property actually had to give up being self-employed in order to secure a mortgage.

If you are self-employed and looking to apply for a mortgage, following these top tips could help the process run smoothly:

  1. Find an independent mortgage adviser who can provide you with good advice and offer continued support throughout the application process.
  1. Be prepared for the process. Applications should be accompanied by the necessary accounts prepared by a suitably qualified accountant.
  1. Ensure your accounts are up to date. Unlike other lenders, Aldermore will usually use the latest years’ figures rather than an average of the last two years when making the assessment, if net profit is level or rising.
  1. Be aware of your credit score. There are a number of credit bureaus that provide credit reports and are a great way to understand your credit history and can give tips to improve your financial health.
  1. Mortgage providers often require both business bank statements and personal bank statements so make sure these are in good shape.
  1. Be aware of change. If you are considering switching company type prior to applying for a mortgage, this could get in the way during the application process.
  2. Consider business performance. Mortgage providers will evaluate the performance of the business and they are looking for profits to be consistent or increasing.

By following these simple tips, the dreaded difficult mortgage application process that many self-employed individuals face should become less challenging.