Sole Trader Mortgages

Updated 19th September 2020

Sole trader mortgages by Mortgage Experts Online

This article will tell you everything you need to know about sole trader mortgages. Sometimes known as self employed mortgages. We talk to people who are a sole trader or any self employed person, they have been to their bank and been turned away, the frustrating thing is they aren’t told the reason why. This can leave the sole trader thinking they can’t get a mortgage, which simply isn’t true. Mortgage Experts Online have sole trader mortgages and self employed mortgages experts ready to help.

Each lender has different criteria when it comes to lending their money, your mortgage expert will know exactly who to place you with for your circumstances. An important factor to sole trader self employed mortgages is presenting the information in the best way possible to the lender. Our article below will give you an insight to the different aspects of sole trader mortgages and what’s involved.

To speak to a mortgage expert call 0300 1245655 or click on our enquiry form.

sole trader mortgages

How long do I need to be a sole trader before I can get a mortgage?

Before you can apply for a sole trader mortgage you must have been trading for a minimum of 12 months. The more time you have been trading the more options will become available to you – once you have been trading for 24 months the options available will increase significantly. If you have only been trading 12 months you will need a higher deposit than if you have been trading 24 months.

Sole traders can also work under the government scheme known as Construction Industry Scheme (CIS Mortgages). Some lenders will asses you as employed with 6 months remittance slips. Our article on Construction Industry Scheme mortgages and how we can really get the most borrowing for Construction Industry Scheme workers, this can be found here. Using the CIS voucher when assessing mortgage affordability could also increase your borrowing.this is our case study here.

How do I prove my income?

Tax calculations & tax year overviews are the most common way to show income. Once completed and filed with HMRC  they will issue these documents to you. These will show income declared and the tax to be paid, also any income from any rented properties or interest from savings and investments. Documents can be downloaded from government gateway system by clicking here

Lenders might also request your SA100 – this happens very rarely but can be requested. Becuase sole traders aren’t required to use an accountant its extremely rare for a lender to ask for this.

Standard documents will also be required as any mortgage application.

  • Identity documents
  • Proof of address.
  • Personal bank statements.
  • Proof of deposit.
  • Business bank statements.

Any lender may ask for additional documents once the case has been initially underwritten.

How much deposit will I need ?

One big factor will be the amount of time you have been trading. when you have been a sole trade for 12 months, then you will be looking at a 15% deposit. After you have been trading 18 months and have an accountant’s projection for year 2 it could be possible with 10% deposit (this will also come down to several other factors). Once you have 24 months trading then options can start from 10% deposit.

It it possible to have a 5% deposit and use the government backed Help to Buy scheme. All information is covered in our Help to Buy mortgage article, click here to read more

Bigger the deposit you have the stronger your case will look and the lower the interest rate will be. Do you want more information about latest sole trader mortgages criteria? speak to one of our mortgage experts today.

What factors will affect my sole trader mortgage application?

All mortgage application will have basic requirements that the lender will need to check, the four main factors are listed below.

  • Deposit.
  • Trading history.
  • Affordability.
  • Credit profile.

I have bad credit can I get a sole trader mortgage?

Yes, the criteria for bad credit is the same if you’re employed or self-employed.  If you have only been trading 12 months the options are more limited but not impossible. We have helped sole traders get mortgages with bad credit such as:

Because all sole trader mortgages are different, the best advice is to speak to an expert. Our mortgage experts will be able to guide you through the entire process and ensure you receive the best rate and borrowing amount for your circumstances.

To read more about bad credit mortgage, click here to read out article

Speak to a sole trader mortgage expert

There are many lenders available ranging from high street to specialist lenders. Most people go to their own bank, get declined or can’t borrow what they need – just because one lender has declined you, don’t give up.

Our mortgage experts will look at each case before deciding which lender is right for you and your individual circumstances. All the mortgage brokers we work with are whole of market and offer unbiased advice. They will have access to all the specialist lenders to really enhance your chances of achieving the mortgage you need.

All our expert brokers we work with have experience in dealing with all aspects of sole trader mortgages, and importantly using the whole of the market to access the very best deals available.

To find out how we can help call us on 0300 124 5655 or complete our quick enquiry form to speak to a mortgage expert.

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