There are a growing number of people in our society who choose to work for themselves and are therefore regarded as self employed. Such individuals may be required to apply for specialist self employed mortgages when buying a home rather than traditional mortgages.

Working on a self-employed basis can have its advantages and an estimated one-quarter of the UK’s workforce choose to work for under this arrangement. Unfortunately for workers who choose this lifestyle, securing mortgages without any hassle is not one of the advantages.

People who work as employees generally find it easier than the self-employed to secure standard high-street mortgages. This is because they normally possess documents that will prove their income so lenders perceive them as having income security.

However, this is not the case for the self-employed and because of this specialist self-employed mortgages have become readily available in recent years.

Lenders may sometimes consider applications for standard high-street mortgages from self-employed applicants if they can provide three years worth of accounts that show a healthy profit.

This is not possible for many self-employed workers because they may have been in business for less than three years and the income shown on their accounts may have been mitigated for taxation purposes.

In recent years, many lenders recognised this dilemma and subsequently brought specialist self-employed mortgages to the market to cater for it. These unfortunately are no longer available.

These products were known as self-certification mortgages and offered relief to the self-employed as they did not require full proof of income or employment status.

Instead of providing proof of income with accounts, pay slips, or any other documents, the self-employed mortgage applicant would simply declare their income on the mortgage application form.

Despite the fact that no proof was required, people applying for self-employed mortgages would have been made aware that it was considered fraud if they exaggerated their income in order to obtain a mortgage.

Applicants should only borrow what they can afford to repay regardless of the amount of proof required by the lenders of self-employed mortgages.

The various self-employed mortgages that are available from many different lenders have different terms and conditions so it is a good idea to speak to a UK Mortgage Advice Ltd adviser in order to find out what self employed mortgages are the most suitable to your circumstances before applying.

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