Self-Employed Mortgages in Hull
Self-Employed Mortgage Advice in Hull
We are finding it more and more common to find self-employed applicants in Hull. This is down to work patterns changing in Hull. As a Mortgage Broker in Hull, we rarely see people planning to stay with their first employer all the way through to retirement. They want to change their jobs to improve their personal development and financial situation.
There are lots of opportunities for the self-employed and freelancers within the Digital and Engineering sector. This is down to the world becoming more and more interconnected. We are constantly learning which opens more and more opportunities for the self-employed within these industries.
It used to be hard to get a mortgage when you were self-employed. However, now that it is becoming more common to be self-employed and there are lots of gaps opening up in the market, lenders have become more relaxed and lenient with self-employed applicants. It’s now much easier to get a mortgage being self-employed than ever before.
Self-Employed hints and tips in Hull
To get you ahead of the mortgage game, we have put together a small collection of some helpful hints and tips if you are self-employed and thinking of moving home. Whether you have been in this game before or you are First-Time Buyer in Hull, we are sure that you will find our service beneficial.
How many years’ books do I need?
The minimum you will need is one year’s accounts to get a mortgage. If you go with a self-employed specialist lender, you will find that they often work off a single year. High street lenders are stricter and will want two year’s accounts.
Unfortunately, statistics show that most new ventures end up being unsuccessful and this is why lenders always need you to evidence your track record.
How will a lender assess my income?
Most lenders will look at the average of your last two years’ worth of income. Although, if your business has grown over the past year and the lenders can see that you will be able to afford a mortgage and run your company, they will go off the latest year and ignore anything that happened before.
I’m a director of my own limited company
If you are a director of your own limited company, you are technically an employee of your own business. Lenders don’t see it like that and will only assess you as an employee if you own less than 25% of company shares.
Lenders often add the dividend you have drawn to your annual salary as a way to work out your annual earnings. The amount that you can borrow for your mortgage will be based on a multiple of this figure.
You will find the odd lender that will work from your net profit rather than your salary/dividend. This works in the favour for directors who like keeping their drawings low.
My accounts don’t reflect the true success of my business – what can I do?
As an experienced Mortgage Broker in Hull, we always get asked this! During your annual meeting with your accountant, you will talk about how to minimise your tax liability. This works the other way when it comes to taking out a self-employed mortgage, the more income you have declared, the bigger the mortgage you can get.
How much deposit do I need to put down?
A minimum of a 5% deposit is still required for a self-employed mortgage. It’s exactly the same as employees. If you only have one years’ accounts, you might have to put down slightly more to increase your chances. To find out more on how much you need for a deposit in Hull, click here.
For contractors, there are lots of different mortgage options available. Nowadays, it’s more common to find people working from short-term contracts. If you can evidence a good track record, your lender can consider taking your ‘daily rate’ over your net profit. This benefits contractors as lenders will consider treating you as self-employed instead if that works out better.
You will need to know long is left on your current contract as lenders will ask you this. They must be certain that your income will be ongoing so they now whether or not that you will be able to afford your mortgage. It is even possible to get a mortgage when you are on your first contract. Of course, this all depends on your specific circumstances.
Can I still get a self-cert mortgage?
You can no longer get a self-cert mortgage as they were widely abused. In no means is there plans for these to make a return anytime soon.
Self-Employed Mortgage Advice in Hull
We know that trying to get a mortgage as a sole trader, partner or company director can be difficult. It can be much easier for an employed applicant. Depending on the lender that you go to, some are stricter with their criteria than others. This is why approaching a local Mortgage Broker in Hull, like us, could benefit you.
We can give you a realistic expectation from the start. Guiding you through the self-employed mortgage process and search through thousands of mortgage deals on your behalf. Every customer can receive a free initial Mortgage Consultation so make sure that you get in touch with one of our Self-Employed Mortgage Advisors today. We can talk you through the best route for you to take based on your self-employment history.