It is a common misconception that mortgages for the self-employed are difficult to obtain.
What is certain that if you know where your numbers are, and you plan it out, then getting a mortgage for the self-employed should be reasonably easy to achieve.
Whether you’re a sole trader, partnership or limited company, the key is in the planning!
So, how far in advance would you plan out your next mortgage?
This may come as a surprise, but I plan my mortgage out around 18 months before it is due!
Why? With some lenders, they will look at salary and dividends, some look at salary and net profits, so it is in your best interest to know what your profits are going to look like and which lender will consider your mortgage, and if you’re a limited company, it will then help determine what level of dividends or net profit you need to declare to achieve your mortgage goals.
The other thing to take into account is that lenders will usually consider your accounts up to 18 months old, so if you’re year end is March, then for example, accounts from year end March 2020 will remain valid with most lenders until September 2021. That’s quite a long time for them to be current and usable with lenders, in particularly at times like we are living at the moment with the pandemic as the figures you may have closed off at the end of last month can potentially be used until September next year.
This probably sounds quite complicated, but the key thing is to talk to someone like ourselves who understand how your income is made up, ask you the right questions and know how to get it placed with the lender that can give you the best options!