Right then — let’s have a proper chat about this because, if you’re anything like the freelancers I know around Birmingham, you’ve probably wondered at some point how on earth you go about getting a mortgage when your income’s up and down like a yo-yo.
Truth is, getting a mortgage while working for yourself isn’t as terrifying as people make out. Yeah, it’s a bit more paperwork, and you might have to explain yourself a bit more than someone with a steady 9-to-5, but it’s doable. Plenty of people do it. You just need to know how to play the game.
So, Is It Tougher for Freelancers?
In all honesty — a bit, yeah. It’s not because lenders hate freelancers or think we’re all dodgy, it’s because they love seeing predictable, tidy payslips landing on the same day each month. And well, let’s face it, freelance life isn’t exactly that tidy, is it?
One month you might be flying, next month you’re chasing invoices. Lenders get a bit twitchy about that. They want to see proof that you can keep the mortgage payments going even if a couple of clients vanish off the face of the earth.
What Paperwork Will They Want to See?
Ah, the paperwork. It’s not the fun bit, but it’s what makes or breaks this process. If you can get your documents together early, you’ll save yourself a load of grief later.
You’ll usually need:
- Two or three years' worth of SA302s from HMRC (those handy summaries of what you’ve earned).
- Tax year overviews to go with those.
- If you’ve got an accountant, even better — signed-off business accounts help.
- Bank statements — personal and business ones. Six months’ worth is usually about right.
- Proof you’ve actually got a deposit ready and waiting.
And of course, your bog-standard ID and proof of address.
How Much Can You Actually Borrow Then?
Good question — and it does depend on how much you’ve earned over the last couple of years. Lenders tend to take an average figure, but if your most recent year’s income is a fair bit higher, some might work off that instead.
Best thing to do? Fire up a mortgage affordability calculator UK and have a little play around. It won’t be exact, but you’ll get a decent idea of what ballpark you’re in before you start seriously house-hunting.
Ways to Make Yourself Look More Appealing to Lenders
Look — lenders aren’t heartless, they just like people who make their lives easier. If you can show you’re sensible with money and not living hand to mouth, you’ll be fine.
A few little tips to help your case:
- Separate your business and personal money. If your accounts are a mess, lenders lose confidence fast.
- Clear down any debts you don’t need hanging around. Got an old credit card with a balance on it? Might be time to pay it off.
- The bigger your deposit, the better. If you can scrape together more than 10%, you’ll get access to better rates — especially on the best mortgage loans for self employed borrowers.
- Keep your spending in check before you apply. Now’s probably not the moment for a new car or a trip to Thailand.
Should You Use a Broker?
In a word — yes. And not just any old broker, either. You’ll want someone who actually understands what it means to be self-employed. The best mortgage brokers Birmingham will know which lenders don’t mind a bit of income fluctuation and who’s likely to offer you a deal based on just one year’s accounts if that’s all you’ve got.
They’ll also know who to avoid — some lenders are still living in the dark ages when it comes to freelancers.
Honestly, a good broker will save you hours trawling comparison sites and dealing with lenders who don’t get it.
What If You’re a First-Timer?
If you’re a first time buyer mortgage UK hopeful, don’t panic — there are deals out there made for people like you. Some lenders offer better rates or incentives for first-time buyers, and you might be able to get away with a slightly smaller deposit too.
That said, as a freelancer, the rules don’t shift much. You’ll still need to prove your income, and you’ll probably need at least a 10% deposit. But it’s doable, and there are a good few lenders who are more flexible than others.
Give Your Budget a Good Stress Test
Don’t just look at what you can borrow — look at what you can actually afford. Big difference.
Sure, a mortgage affordability calculator UK will tell you what a lender might be willing to give you, but you know better than anyone what your quieter months look like. Test those figures out at higher interest rates too. See what it’d look like if rates went up a couple of percent. If it still feels manageable, you’re probably onto something solid.
A Final Thought from UK Mortgage Broker
Look, getting a mortgage when you’re freelance might be a bit of a faff, but it’s nowhere near as bad as people make out. Bit of paperwork, a good broker in your corner, and a realistic look at your budget — you’ll be fine.
At UK Mortgage Broker, we’re used to dealing with freelancers, contractors, and the self-employed. We know which lenders offer the best mortgage loans for self employed and how to package your application so it lands well. We’ll happily run your details through a mortgage affordability calculator UK too, so you’ve got a proper idea of what’s realistic.
And if you’re after a first time buyer mortgage UK deal? We’ll sniff out the good ones for you and steer you clear of the duds.
Fancy a chat about it? Drop us a line. No obligation, no pushy sales nonsense — just honest advice from people who get it.