self employed

Our special interest is the self employed

At BIFS, we have a special interest in serving the self-employed sector. We have good knowledge of which banks and building societies offer competitive interest rates for, and are much likely to lend to, those who are self-employed, and we can provide advice on which personal pensions are most suitable.

Self employed are underserved

According to National Employment Savings Trust and The Mortgage Lender, only 24% of self employed people are saving into a pension and 45% can’t provide the right documents for mortgage lenders. We are developing innovative partnerships with organisations such as YellowWork.io to make access to essential financial products and services easier.

Acquiring a mortgage

Lenders will typically view you as self-employed if you are a sole trader or company director and own more than 20% to 25% of a business from which you earn your main income. You are required to apply for the same mortgages that are available to people in permanent employment, and you’ll need to pass the lender’s affordability tests in the same way as those borrowers. As you do not have a permanent employer, however, to verify your income, you will be required to provide evidence of:

• 2-3 years SA302 forms or a tax year overview from HMRC
• 2+ years’ certified accounts
• Maybe evidence of upcoming contracts
• Maybe evidence of dividend payments or retained profits (if you’re a company director)

FAQs

Do self-employed people have to pay higher mortgage rates? The mortgage deal that you receive should be the same as someone with a comparable salary in a permanent job.

What other evidence do I require?

Mortgage lenders will request proof of identification and residence, such as a passport and recent utility bills. Lenders may also want a bank statement to view your annual expenditures in order to ascertain whether you can afford your mortgage repayments.

What if I have less than 2 years of accounts?

You may find it difficult to convince lenders that you can afford to repay the mortgage, but other evidence of regular work may help. A healthy deposit and good credit history will also boost your chances of securing a mortgage.

What can I do to boost my chance of receiving a mortgage?

You can save more for a deposit, ensure your credit rating is high, get on the electoral roll and speak to a BIFS mortgage broker.

At BIFS, we have decades of experience in helping the self employed get on, and move through, the property ladder, as well as become prepared for retirement. Please call us on 01322 446 934 or email di@bifs.co.uk for a free consultation.

This information is intended only as guidance. Please seek advice from one of our qualified independent financial advisors.