The Best 10 Mortgage Lenders for Self Employed
The Mortgage process doesn’t have to be painful because your Self Employed, but that’s often how people feel.
And whilst it’s fair to say that some Mortgage Lenders may not be the friendliest when it comes to the Self Employed, there are plenty of others which not only are, but Specialise in making Mortgages happen for this very type of borrower.
How are some Mortgage Lenders different?
It all comes down to risk. And while some Mortgage Lenders put in place strict criteria which can penalise self employed applicants, others create criteria to specifically help them.
For example, some Lenders will take your most recent tax years earnings to give a boost to borrowing capacity. While others will always take an average of the last two years earnings or the latest years (only if it’s lower).
Some will require you to be in business for 2 years, and others only a year (or less in some cases such as CIS Contractors).
The Best 10 Mortgage Lenders for the Self Employed
1. Coventry Building Society
Will always use latest years trading figures, providing current earnings on the company or applicants bank statements support it.
By far the most fair and sensible way any Lender treats Self Employed Applicants.
How this can help. Lets say Mr Plumber’s most recent trading year shows earnings of £40,000, but the previous trading year only shows earnings of £12,500.
Providing current trading supports the latest years figure, the Coventry will use the £40,000 for affordability purposes.
Nearly every other Lender in the market will use an average of the last two years earnings.
2. Halifax
The largest and probably most well known Mortgage Lender on our list, Halifax.
Halifax has a wide array of criteria designed to support Self Employed Applicants.
It’s stand out criteria is considering those that have been Self Employed for just a year. As most Lenders require a minimum of 2 years Self Employed earnings history.
3. Skipton
Another large Building Society on our list, Skipton.
Skipton not only offers some of the best service in the market, they are also flexible with how they assess Limited Company Directors.
They will accept a Directors Salary and Dividends or Salary and share of Net Profit, whichever is best for the applicant.
This isn’t common, as most lenders will use one or the other.
4. Accord
Accord does something relatively unique, which is why they have made our list.
Practically every Lender will require sight of the applicants Business Accounts (if a Director) and/or Tax Calculations & Overviews (if a Sole Trader).
Accord prefers an Accountants reference. This way the Lender will get to see your previous years earnings, as declared by your Accountant, plus your Accountants projection.
This could be beneficial if you current trading is performing better than previous years.
5. NatWest
While NatWest can be quite extensive when it comes to underwriting Self Employed applicants, they do accept a wide array of income that many other Lenders won’t.
This includes income derived from Foreign Currency and other unusual income streams such as Stipend income.
6. Generation Home
The newest Lender on our list.
Generation Home is tapping into AI to help process Mortgage Applications in hours, in some cases.
They will require 2 years Self Employed earnings, but will too look to use latest years figures if current trading supports this.
7. Foundation
Foundation is a Specialist Lender that looks to accept more complex Self Employed cases.
They will consider using latest years figures, retained profits and those with adverse credit incidences too.
8. Kent Reliance
Kent Reliance is a Specialist Mortgage Lender who has considerably more flexible criteria than most high street Lenders.
They will look to take latest years earnings typically, will consider adverse credit and a wide array of applicants.
9. Precise
Precise best serves the adverse credit market.
So if you’re Self Employed and have had historic and/or recent adverse credit, Precise may be able to help.
10. Aldermore
Aldermore again is a Specialist Lender who has a lot of Self Employed friendly criteria, but also accepts a wide array of applicants including Adverse Credit for those with smaller deposits.
Need Advice? Speak to one of our Mortgage Advisors
Whilst you now have a taste of what Lenders will be able to help you, it’s all about how your Application is presented to the Mortgage Lender.
A Mortgage Advisor will know which of the above Lenders are going to best for you.
Whether that’s based on price or maximising your borrowing capacity.
If you would like our help, please click the contact us button at the top of the page, and one of our Mortgage Advisor will be happy to help you.
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