Mortgages and remortgages for the self-employed. Page 2

Self-employed people normally have a harder time obtaining a mortgage. A self-employed person is

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described as someone who runs their own business and works for themselves without an employer. Even directors of small limited companies, will normally be classed as self employed when it comes to applying for any type of mortgage . It can be a big issue too many families as about 5% of the UK ( cheap life insurance ) are self employed, and mortgage lenders are very strict with self employed workers. The main problem is that lenders require proof of income when assessing a mortgage or remortgage application. Employed people can use their pay slips and P60 as proof of salary, but there is no real equivalent if you are self-employed.

In place of pay slips, self-employed workers are normally required to provide audited accounts that profile their income over the last three years. These are not always a reflection on the workers actual income as accountants offset as many expenses as possible against tax, which is good for the self employed tax payer, but bad for the self-employed workers net profit, which is what the lender will base the size of mortgage they can offer. It is even harder for newly self employed workers as they do not have 3 years of accounts to show for.

For new self employed workers and even self employed workers who find it difficult to obtain mortgages with the average lender ( life insurance ) they need to be pointed in the direction of specialist lenders that deal with self certification, and look at each individual and assess their situation.