Buy to let mortgages for the self employed can be difficult to get. But don’t think for one second being self employed somehow restricts your options or interest rates are different. They’re not..period. However, the process of getting a buy to let mortgage if you are self-employed can be harder. Let me share with you why a buy to let mortgage for the self employed can be a royal pain in the ar#$!
Buy to let mortgage for the self employed can make you crazy!
Listen I’m not going to start by saying it’s easy to get a buy to let mortgage, or in fact any type of mortgage for that matter…it’s not. And anyone who tells you otherwise is talking rubbish. So just be warned!
However, the process of getting a but to let mortgage if you are self employed can be harder or easier depending on the lender…of course you are never going to know this! Not only that, one lender may be the flavour of the month now, but trust me, this doesn’t last!
Why but to let mortgage lenders don’t care!
Oh and did I mention, they really don’t care if you get a mortgage? They are looking for every reason to say ‘no’….and that’s the honest truth.
Don’t forget, you’re dealing with people in a call centre, in a bank, in a building society who are completely detached from any emotional attachment to you.
So dealing with banks and building societies is the biggest pain for us as independent mortgage brokers…and let me tell you why…it’s because we care. But don’t worry, this is for us to worry about and deal with, not you!
As I said, the reality is sometimes one lender is doing well, then they drop the ball and are absolutely useless.
So don’t worry, it’s not you who is crazy, it’s us! After all, we are the ones dealing with these lenders!
Buy to let mortgage for the self employed – the dull reality!
Okay, this is where I tell you the truth…
I know it’s a pain, but you have to get your paperwork up to date and organised. I know, I know…most of you hate paperwork.
If you can just make a bit of effort to get stuff done, trust me it will be worth it. Because after all if you want a mortgage, you have to do it. So you either do it the easy way or the hard way. Either way, you have to do it, so you might as well do it right first time.
Oh and just a reminder, it’s not me that’s making your life a pain…it’s the banks and building societies, so don’t shoot the messenger. I just want to tell you how it is!
So its usually a good idea to speak to an independent mortgage adviser (like us) to help with this process and make sure it runs smoothly after all self-employed mortgages are not always straight forward.
Tip for the self employed getting a buy to let mortgage:
But as a little tip, I do genuinely think it is beneficial to work with a firm who are experienced and regulated in a wide cross-section of mortgages as they will be able to help with any future need you may have. It helps you to keep continuity and build a close and trustworthy working relationship with them.
They also might be able to think more outside the box, if you have a complex scenario. For example, an adviser who only deals with buy to lets, won’t be able to think holistically. Whereas an adviser who deals with residential, buy to let, holiday lets, HMO, commercial etc, will have a broader perspective and is better equipped to help not just now, but in the future too.
The reality of a self-employed buy to let mortgage!
Okay, so you want to get organised for your buy to let mortgage. Great…you are AMAZING 🙂
Here is a few pointers of the typical documentation you will likely need. But don’t forget ever lender is different and may ask for different things! Always get advice from your mortgage broker, even if it’s not us.
A good mortgage adviser needs to be organised and prepared. They should be letting you know (as much as possible) what documents you will need in one hit.
It’s a huge pain in the bottom! We always give our clients a list of things we need in one hit at the beginning, then it’s done.
The reality is, of course sometimes lenders through a curveball and ask for something else… anyway here is a few pointers:
- Accounts – ideally 3 years, however, some lenders will accept 1 or 2 years depending on how long you have been trading.
- SA302’s for the last 3 years – more on that later!
- Bank statements.
- Photo ID.
- Evidence of your address.
- If you are buying an investment, then proof of your deposit is required.
Self-employed buy to let mortgage tips:
Knowing what to look for and how lenders will assess you is helpful in understanding how best to get the best buy to let mortgage deals.
Buy to let mortgage tips:
- If your latest set of accounts have not been finalised yet, this is the perfect opportunity to speak to a mortgage adviser to see how your tax planning might have an effect on your capacity to borrow.
- Once your accounts are finalised, that’s it for another year, so don’t assume everything will be okay unless you have bothered to speak to an adviser beforehand.
- Get your accountant working closely with your broker – this could save you time, money and maybe even disappointment!
- Once all your accounts are up to date, then request your SA302’s from the inland revenue. The SA302 is a bit like a P60 for the self-employed.
Like I said there are no restrictions for the self-employed to get finance per se, but it’s important you get all your ducks in a row. This will make the process of getting a buy to let mortgage easier if you self employed.
Restrictions for the self-employed!
Technically there aren’t any, however, some lenders do have restrictions. But this is based on lending criteria, not the availability of mortgages for the self-employed.Don't forget buy to let lending criteria always changes and every lender is different, but here are a few general pointers: Click To Tweet
Buy to let mortgage restrictions:
- If you are thinking of getting finance for an investment property and are currently employed but thinking of soon becoming self-employed, then act now. Some lenders require the self-employed to have a minimum trading period which can be as much as 2 years. So act now if this is the case, otherwise, it could be a long wait before you can do anything!
- If you are a professional landlord, then some lenders may restrict their lending/exposure to you. This is not to say there are not lenders who would lend, it’s just something to be aware of and is another good reason why speaking to a mortgage broker for self-employed is important.
- Some lenders also have minimum income requirements either for an individual or as a couple.
- However some lenders do not have any minimum income requirements, however, you still need to evidence some income, even if it’s £1.
- If you are an ex-pat working abroad there are some niche lenders out there.
Buy to let mortgage despair!
I know I have pointed out the complications and hassles but the truth is, this is just the reality! We have to deal with it, except it and get on with it…and hopefully, it will be the mortgage guy or girl dealing with it, not you!