What we cover in this guide
- What is a Self-employed mortgage?
- Self-employed mortgage calculator
- Self-employed mortgage requirements
- Getting a mortgage when self-employed
- Proof of income for a self-employed mortgage
- Self-certified mortgages
- Can I use dividend income to get a mortgage?
- Getting a mortgage with two years’ accounts
- Self-employed mortgage lenders
- Self-employed mortgage brokers
- Frequently asked questions
What is a Self-Employed mortgage?
The term ‘Self-employed’ covers many kinds of situations, from sole traders to contractors and those in company partnerships.
Different businesses will have different ways of distributing dividends and/or profits, and not everyone easily understands scenarios like retained profits and dividends that we look at when considering your mortgage. Our specialist advisers will ensure all the income from your company is considered.
You may be relieved and surprised to know that there are no such things as specific ‘Self-employed mortgages’.
What is an SA302?
The SA302 form, provided by HMRC, confirms a self-employed mortgage applicant’s income. It details income sources, including self-employment and dividends. Lenders use it to meet FCA affordability rules. You can access up to four years’ SA302s on HMRC’s website when submitting your return online.
You will need to request original SA302s from HMRC if:
- you do not have access to a printer.
- you are applying to a lender who will not accept self-printed forms.
- you submit your tax returns by post.
You can contact the self-assessment helpline on 0300 200 3310, or you can write to them.
Self-Employed Mortgage FAQs
- How much can I borrow for Self-employed mortgages?
- I've been declined by my bank, can I still get a mortgage?
- Can I get a mortgage using retained profits?
The amount you can borrow can vary considerably depending on the lender. Each will have their own method of calculating your income. For example, some may simply use the latest year’s tax return as a guide. While others will take an average of the last two or three years’ figures.
Like with a standard mortgage, the larger your deposit and the higher your income the more you can borrow. Try our self-employed mortgage calculator to gain an indication of how much you could borrow.
Being declined by your bank certainly does not mean you cannot get a mortgage somewhere else. After all every lender calculates your credit score differently.
If you’re declined a mortgage for any reason, it’s worth speaking to a specialist mortgage broker.
Using retained profits for a mortgage can be challenging. Mainstream lenders often don’t count them as income. While they consider dividend income alongside salary, profits left in your business are usually excluded.
However, specialist lenders do consider retained profits. Our brokers can provide a detailed assessment of your options.