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Getting a Mortgage as a Freelancer

Getting a Mortgage as a Freelancer image

Getting a mortgage as a freelancer is notoriously difficult. In many cases your earnings fluctuate from month to month, so you have varying levels of income throughout the year, you have little job security and you may also need to make significant investments into your own business from time to time.

All of these factors can make lenders nervous, but that doesn’t mean that getting a mortgage as a freelancer is impossible.

Here are a few things to consider as well as some practical advice on self-employed mortgages and getting a mortgage as a freelancer.

Trading period

Many lenders are happy to give mortgages to self-employed people or freelancers if they’ve been trading for more than three years and have two years of tax returns and business accounts to prove income.

If you’re thinking of getting a self-employed mortgage soon, but haven’t been trading long enough, it’s better to wait until you can provide the lender with the evidence they require before putting in an application.

On the plus side, this will give you a little more time to continue to build your business and save more money towards your deposit should you need to.

Deposits

Some lenders will impose stricter rules on the amount of deposit you’ll need to get a freelance mortgage, so you may need to dig a little deeper to come up with the extra funds before they’ll accept you for a mortgage.

This isn’t always the case though, as some lenders may prefer to see future profit projections to ensure that you can afford the repayments now and in the years to come.

Shop around to find reputable lenders who are well-known for offering self-employed mortgages and approach them first to see what kind of deposit or projections they’ll expect to see.

Once you’ve decided which one you feel offers the best fit for your circumstances, you can apply for your mortgage.

Keep your files in order

To really increase your chances of being accepted for a freelancer mortgage, you’ll need to make sure that all of your accounts and tax returns are up-to-date and in good order, as the lender will need to see this evidence before considering you for a mortgage.

This along with a solid credit rating, a healthy deposit and watertight accounts will go in your favour, so do all that you can now before making an application.

Ideally, you’ll be thinking of getting a mortgage and making repayments before you make the decision to go freelance or self-employed as it does make the process of applying for a mortgage and the chances of being accepted for more favourable terms far easier if you’re currently in regular paid employment.

However, if you’re thinking of freelancing or self-employment as a career option for the future, take our quiz to see if self-employment is the way forward for you!