If you are a freelancer and are looking for a mortgage, you can still apply for the same range of mortgages as people in employment. The only difference is that because you don’t have an employer to confirm and verify your income, you will need to provide evidence to your lender that you have a steady, reliable income and can meet their affordability criteria. While many mortgage lenders will lend to freelancers, most will view this as riskier than lending to those in employment, so will apply more stringent criteria when it comes to checking your income.
At the very least, if you are a self-employed freelancer, you will probably have to prove you’ve been trading for at least three years and have at least two full years of accounts or self-certification records to get a self-employed mortgage.
What is a freelancer mortgage?
Self-employed – or freelancer – mortgages don’t really exist. In reality, you are still applying for regular mortgages but will just have to meet different lending criteria – which can make getting a mortgage as a freelancer a bit more tricky than it would be if you just worked a regular job.
Many freelancers have variable income – some months, they might not earn much or have to wait to get paid, before receiving a bumper payday in others. Most lenders will evaluate your application by looking at your income sources and your trading history to determine how secure and reliable your income is and how much you can afford to repay.
They are looking for a consistent pattern of income over a long period and may pick up on any gaps in your activity, particularly if they are recent. Because of the variable nature of freelancing, lenders tend to view freelancers as riskier prospects than those in employment, even if you have a proven track record of success and can prove your income has grown.
So, the more information you can provide the lender, the better.
Some lenders might average out the income you’ve earned over recent years. Others may base their decision on your latest set of accounts, or on the lowest you’ve ever earned, it all depends on your personal circumstances.
Different lenders have different rules, so working with an expert mortgage broker will ensure you get the right advice to help you get ready prior to submitting your application.
How do mortgages for freelancers work?
Applying for a mortgage as a freelancer is a relatively straightforward process, the trick is finding the right lender and preparing your application correctly. While you’ll still have access to the same lenders and mortgage products as everyone else, you’ll just need to prove your income in a different way.
All that lenders are interested in is your ability to pay. So, even as a freelancer, provided you can meet the lender’s criteria, you’ll be eligible for the same mortgage rates as anyone else. To qualify for the best rates and most competitive deals, you’ll need to prove to the lender that you have a reliable, consistent income stream and can afford the repayments.
The range of mortgages available to you may start to narrow the more gaps and inconsistencies you have in your trading history. In these circumstances, you might need a bit of specialist support and that’s where My Mortgage Pro can help.
We can connect you with an expert mortgage broker who specialises in mortgages for freelancers and can ensure you get the right advice to help you get ready prior to submitting your application.
Can I get a mortgage for freelancers?
If you are a freelancer, you can still get access to the same range of mortgages as anyone else. In fact, if you can prove you have a stable, long-term income as a freelancer, you may even be able to get access to the best interest rates and deals on the market.
It all depends on your personal circumstances. It is possible to get a mortgage as a freelancer, provided you can demonstrate to the lender that you can afford the repayments and can manage your finances sensibly.
This means proving you’ve got a steady income, but also doing things like making sure you’ve met any other outstanding credit or loan payments on time, ensuring all of your regular outgoings – such as utility bills and credit cards – are paid on time, and not taking on any new debt.
Also, the more money you have for a deposit, the better, as this will help to bring down the total amount you need to borrow and might even help you to get a better mortgage interest rate. However if you want to learn more about trying to get a mortgage with a low deposit then read here.
Contact us for more information about mortgages for freelancers
My Mortgage Pro is a professional mortgage information service. While we don’t give advice, we aim to provide you with simple, jargon-free, no-nonsense information about mortgages for freelancers to help you make the right choice. We can also connect you with a specially selected panel of leading mortgage advisers, who are authorised and regulated by the Financial Conduct Authority, who will provide advice tailored to your specific circumstances and help you find the right freelancer mortgage, fast.
To find out more and request a call, fill out the form below.