Firstly as always stated, we cannot stress enough that first and foremost, the more deposit you manage to save up, the better, this is probably even more so in the case for those who are self-employed, especially if your profits are not that big. So deposit is first and foremost. Check your credit ratings for your business and for yourself. Make sure you do not have any outstanding debts for either. Pay off all those you owe money to and do not rack up anymore, pay as you go! Take all the help you can get, if you can live with your parents while you save, great, if they want to help you get onto that property ladder by giving you some money, even better. The more you have as a deposit, the better off you will be as your monthly payments will be less.
Maybe in the case of being self-employed, enlisting the help of a commercial mortgage broker is also a very good idea as they are experts in finding mortgages and can guide you along as to the lenders who are more likely to give you a mortgage and exactly what you will need to show to prove that you can pay it all back. It’s important to use a broker who has experience in securing mortgages for business in the UK. You may also wish to utilise a commercial mortgage calculator to check how much your business can afford to borrow. Remember, a commercial mortgage is often only for 15 years.
Applying as self-employed, you have to have been trading for over 3 years and be able to show the last 2 years accounts. The key things they will be looking for are your credit rating, how much deposit you have and what your accounts look like so they know whether or no they think you can afford to pay the monthly repayments. They will offset this against what they see as what you have coming in etc. If you don’t already, at this stage it may be worth getting an accountant to look over your accounts thoroughly for you before going to a mortgage broker who will then be able to submit all the information given by you to the relevant lenders. Once again, must stress here that credit rating as a self-employed person is extremely important, this is something they will be checking even more closely than if you were employed by a company. Many of the same principals apply when you’re looking to take a business mortgage as when you’re borrowing personally – CAB (Citizen’s Advice) have some great suggestions on getting a mortgage for business.
So although it can be quite challenging for those who work for themselves and have their own businesses to get a mortgage, it is not impossible and you should give it a go. It’s always good advice to use a mortgage broker such as Mortgage Arrangers who can find the best deal and provide further insight into getting a commercial mortgage for your business. The longer you have been trading, the better as they will see you are dedicated and can get a better picture of what your business makes and whether it is worth them lending you the money. Again, make sure though, the more deposit you have, the better and let the mortgage broker deal with this as they know from previous experience and would have dealt with many other self-employed people in the past to help you along your path and find the right mortgage that will suit you perfectly as well as suit the lender.