Top tips for self employed borrowers

If you are self-employed and in need of a mortgage, the following hints and tips could help you achieve the most successful outcome:

1. Keep your accounts in good shape and up to date

Self-employed-friendly lenders normally only ask to see one year's accounts, rather than three years' demanded by mainstream lenders, but those accounts muct still be clear and accurate.

2. Use a certified or chartered accountant

If you do have an accountant it makes sense to use a fully qualified professional, so make sure they are certified or chartered.

3. Have your SA302 forms and tax overview prepared before you apply for a mortgage

Get hold of your forms in advance as the paperwork can take a few weeks to arrive from HMRC.

4. Make sure your credit record is as healthy as possible

All lenders will take into account your credit rating before they offer you a mortgage, and as a general rule the better the credit record, the lower the interest rates available. There are many steps you can take to improve your credit record, including: registering to vote; getting a credit card and paying off the balance every month and setting up direct debits to ensure your bills are paid on time.

5. Save up as large a deposit as possible

No lender will offer a self-employed borrower a mortgage at 95% loan to value - even the most sympathetic lenders ask for a deposit of at least 10% of the property's value. The golden rule which applies to all mortgage is also relevant to self-employed borrowers: the larger your deposit, the lower the interest rates available to you.

6. Be realistic

Don't overstretch yourself and attempt to take out a bigger mortgage than you could comfortably afford. As a self-employed person your income may be subject to fluctuation, so it makes sense to be realistic about the level of borrowing you can happily take on. Your lender has a duty to calculate this level of borrowing, but if you are not over-reaching in the first place, the process of obtaining a mortgage should be quicker and smoother.

7. Use a mortgage broker

High street mortgage lenders have very little, if any, interest in lending to the self-employed. Specialist providers are more in tune with the self-employed, understand how they operate and look at every case on its own merits. And specialist lenders almost exclusively operate through mortgage advisers who are fully qualified and experienced and the best of who understand the special requirements of self-employed borrowers.