The Self Employed First Time Buyer and Income Self-Certification...

First Time Home Buying Guide - Page 7 of 11:

So, you happen to be a Self-Employed first time buyer and want to know your options when it comes to mortgage funding, well let's take a look.

If you are in business on your own account, either as a director of your own company, or you are self-employed tradesman or professional; you will undoubtedly be aware that most conventional lenders insist that a 3-year accounting profile is provided.

You'll also be painfully aware that if you've been self-employed for less than three years, then your application for mortgage funding is likely to be declined, even though you may have a perfectly good income stream that would be quite sufficient to support the borrowings.

It may well be that you have accounts, but the income shown on them is unrepresentative of the present financial situation. This may be as a result of your turnover dramatically increasing because you have employed another worker, or perhaps because you have diversified your products and now have another income stream. Problems also occur if your income patterns fluctuate from year-to-year, as this will frustrate a conventional lenders ability to approve mortgage funding because they will only take an average of the three-year accounting profile. Unfortunately, it's often the case that a "rogue" year is likely to reduce the mortgage amount that your current income would easily support!

So, we can see that if your latest financial statements do not reflect your current level of income, you will undoubtedly be disadvantaged with a much lower mortgage limit when making a mortgage application through traditional lenders.

The good news is that we have a series of lenders that are prepared to accept the fact that your income is not appropriately served if taken from your last set of accounts, and accordingly will take into account the difference and upward change in your income. This facility is known as income self-certification.

Naturally, it is important that you are able to afford the repayments, as opposed to attempting to unrealistically inflate your income purely to meet the lenders criteria. It cannot be be over-emphasised that your monthly mortgage commitment cannot be avoided. Quite simply your home will be at risk of repossession by the lender if you do not keep up to date with your repayments.

For more information on income self-certification and affordability and mortgage funding for the self-employed, take a look at the following pages...

Next in our essential First Time Home Buying Guide, we'll take a look at the various different types of interest rates and kinds of mortgage open to the first-time buyer.

Types of Interest Rate and Mortgages
available for the First Time Buyer NEXT ›

Enquire Online now, or call us today 08000 282 281 - our freephone lines are open 8am-10pm everyday! We'd love to hear from you!

The overall cost for comparison is 9.8% APR.
The actual rate available will depend upon your circumstances. Ask for a personalised illustration. APR variable and based on a usual case. Most customers are likely to receive a lower rate or the same rate as our overall cost for comparison rate - learn more about APR.

There are no upfront broker fees.
However, a fee may be charged on successful completion. An indication is that on conforming cases (straightforward applications with no or minimal adverse credit) a fee may be charged of up to 1% of the amount advanced, typically £795 and will depend on your circumstances.
For non-conforming cases (where case research and processing may be more complex due to adverse credit or unusual circumstances), a fee may be charged of up to 3% of the amount advanced, typically £1,995.

THINK CAREFULLY BEFORE
SECURING OTHER DEBTS AGAINST YOUR HOME.
YOUR HOME MAY BE REPOSSESSED
IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.

Adding existing debt to your mortgage will increase the repayment term and overall cost.

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