What is a Self-Employed Day Rate Mortgage?

First things first, we’ll let you into a little secret… there’s no such thing as a self-employed mortgage.

If you’re self-employed, you can still apply for the same mortgages as those who are in employment, you’ll just need to jump through a few more hoops.

That’s because mortgage lenders will want to be sure you can afford the monthly repayments, so will require proof of the self-employed income you receive. Most lenders are happy to give mortgages to self-employed people who have been trading for at least three years and have at least two years of audited accounts or self-assessment tax returns available.

Why do I need a Self-Employed Mortgage?

Until just a few years ago, if you were self-employed and looking for a mortgage, you could apply for a self-certification mortgage. These were designed specifically to allow self-employed people to self-certify their annual income, with no need to provide evidence. However, ‘self-cert’ mortgages were banned in 2014, following concerns that borrowers were being accepted for mortgages they couldn’t afford.

It means that now, if you’re self-employed and are looking for a mortgage, you need to apply in the same way as someone in employment, and be able to prove you have a steady annual income from your work. Most lenders will consider you as self-employed if you are a sole trader, company director, or contractor and own more than 25% of the business from which you earn your main income.

You’ll need to pass the lender’s affordability requirements to get a mortgage offer, but because you don’t have an employer to verify your income, you’ll need to provide the evidence yourself. That means the longer you have been trading, and the more years of accounts you have, the easier it will be to satisfy the lender’s criteria.

How can I get a Self-Employed Mortgage?

If you’ve been declined a mortgage by a high street lender because you’re self-employed, you’re in the right place. James Alexander Financial Services can connect you to an expert mortgage adviser who can give you the right advice to suit your circumstances, before finding a specialist lender and the mortgage that’s right for you.

James Alexander FS with the right skills and expertise to scour the whole mortgage market to secure the best deal for you.

So, if you are self-employed and have struggled to find the right mortgage, get in touch today. We’ll hook you up with an authorised and regulated mortgage adviser who specialises in self-employed mortgages and can find the best lender and mortgage deal to meet your needs.

Note: Your home may be repossessed if you do not keep up repayments on your mortgage.