Posted on 22nd March 2023

As a self-employed individual, it can be challenging to secure a mortgage. Unlike traditional employees, you don't have a consistent paycheck or a stable job history. This can make lenders hesitant to approve you for a mortgage. However, being self-employed doesn't mean you can't get a mortgage. With the right approach, you can increase your chances of getting approved for a self-employed mortgage. Here are ten essential tips to help you get started.

Build a Strong Credit Score

Your credit score is one of the most critical factors that lenders consider when deciding whether to approve your mortgage application. A strong credit score tells lenders that you are a reliable borrower who can manage debt responsibly. Make sure you have a good credit score by paying bills on time, keeping credit card balances low, and avoiding new credit inquiries.

Prepare Your Documentation

Self-employed borrowers need to provide more documentation than traditional employees. To get approved for a self-employed mortgage, you will need to provide tax returns, bank statements, and financial statements. Make sure you have all the necessary documents ready before applying for a mortgage.

Use a Mortgage Broker

Working with a mortgage broker can be helpful if you're self-employed. Brokers have access to a wide range of lenders and can help you find a mortgage that meets your needs. They can also advise you on the documentation you need to provide and how to improve your chances of getting approved.

Save for a Larger Down Payment

A larger down payment can help you get approved for a self-employed mortgage. It shows lenders that you are committed to the property and reduces their risk. If you can afford to save for a larger down payment, it can help you get approved for a mortgage.

Keep Your Debt-to-Income Ratio Low

Your debt-to-income ratio is the percentage of your income that goes towards debt payments. Lenders look at this ratio to determine how much debt you can afford. Keep your debt-to-income ratio low by paying off debt and avoiding new debt.

Minimize Your Business Expenses

Lenders will review your business expenses to determine your income. If you have a lot of expenses, it can reduce your income and hurt your chances of getting approved for a mortgage. Try to minimize your business expenses as much as possible to increase your income.

Avoid Large Deposits

Large deposits in your bank account can raise questions for lenders. They may wonder where the money came from and whether it's a loan. Avoid making large deposits into your account before applying for a mortgage.

Be Prepared to Explain Your Income

As a self-employed borrower, you will need to explain your income to lenders. Be prepared to answer questions about your income and how you earn it. Provide as much detail as possible to help lenders understand your financial situation.

Look for Lenders that Specialize in Self-Employed Mortgages

Not all lenders offer mortgages to self-employed borrowers. Look for lenders that specialize in self-employed mortgages. These lenders have experience working with self-employed borrowers and may have more lenient requirements.

Be Patient

Getting approved for a self-employed mortgage can take longer than a traditional mortgage. Be patient and be prepared for the process to take longer. Stay in touch with your lender or broker and provide any additional information they need.

Securing a self-employed mortgage can be challenging, but it's not impossible. Follow these ten tips to increase your chances of getting approved for a self-employed mortgage. Remember to build a strong credit score, prepare your documentation, and work with a mortgage broker. Save for a larger down payment, keep your debt-to-income ratio low, and minimize your business expenses. Avoid large deposits and be prepared to explain your income to lenders. Look for lenders that specialize in self-employed mortgages and be patient throughout the process. By following these tips, you can increase your chances of getting approved for a mortgage and achieve your dream of homeownership.

At Robi Finance Ltd, we understand that getting approved for a self-employed mortgage can be challenging. That's why we offer a range of mortgage solutions tailored to your specific needs as a self-employed borrower. Our team of experienced mortgage advisors can help you navigate the complex mortgage process and find a mortgage that works for you. We pride ourselves on our personalized service, attention to detail, and commitment to helping you achieve your financial goals.

If you're looking for a mortgage as a self-employed borrower, we invite you to get in touch with us at 07956-827018. Our team is here to help you every step of the way and answer any questions you may have about the mortgage process. We look forward to hearing from you and helping you achieve your dream of homeownership.