Documents needed for Self-Employed

Documents Needed for a Self-Employed Mortgage

People tend to think that it is more difficult for the Self-Employed to get a mortgage.

Fortunately, these days that isn’t the case – most lenders are happy to accept people who run their own business. The key to approval is confirming your income, which involves gathering and supplying various documents.

What is a Self-Employed Mortgage?

Self-Employed people apply for the same mortgages as someone employed by a company. The only difference is in how you back up your application with proof of income.

An employed applicant just needs to state their salary and confirm it with a few payslips. But Self-Employed people often have a more variable income, so lenders want more information as reassurance that you can afford the mortgage repayments.

What documents do you need for a Self-Employed Mortgage?

Each lender might have slightly different requests for documents, but you will always need proof of identity. Usually this means a UK photocard driving licence or passport, together with proof of address from utility bills or bank statements.

Then you’ll need some business-related information to help prove your income. These might vary depending on your business set-up:

Sole traders and partnerships: You will usually need one to three tax years calculations. Lenders will accept printouts from the HMRC website, detailing self assessment tax returns (SA302 forms). You can also submit a summary from your accountant.

Limited Company: You will need one to three years worth of company accounts, stating your salary and dividends as well as retained profits. You might also need to supply P60 forms or tax calculations.

Lenders will also take a look at your credit score. If you have always made payments and settled bills on time and stayed within credit limits and overdrafts, you should have an acceptable rating. If your credit record is likely to be more complex, it’s worth checking it online before applying for a mortgage.