If you’re self-employed and planning to buy a home in 2025, knowing how lenders approach these types of applications can make a big difference.

While getting a mortgage can be a bit more complex for the self-employed, being prepared can help you navigate the process with confidence.

What is a Self-Employed Mortgage?

While there isn’t a specific “self-employed mortgage,” lenders often assess self-employed applicants differently. Rather than relying on payslips, lenders need a more detailed view of your income, usually by looking at your earnings over two to three years.

How to Prepare

Gather Your Financial Documents

Having a steady income history is essential. You’ll likely need at least two to three years of SA302 forms and tax overviews from HMRC, or accounts prepared by a certified accountant. Some lenders are more flexible and may accept just one year’s accounts if your income is stable or increasing, so it’s worth exploring your options.

Optimise Income Records

It may seem strategic to minimise taxable income, but keep in mind that lenders typically assess income based on post-tax earnings. Showing a higher income on your accounts may improve your borrowing potential.

Know About Retained Profits

If you’re a limited company director, you might be able to use retained profits to boost your borrowing power. Some lenders will consider this in addition to your salary and dividends.

Prepare for Higher Deposit Requirements

Self-employed borrowers may face higher deposit requirements. Saving up for a larger deposit can improve your chances of approval and help secure better rates.

Looking Ahead to 2025

With potential rate and lending criteria changes on the horizon, now is a great time to start preparing. By organising finances early and considering how much income to report, you can maximise your chances of securing a mortgage in 2025.

If you’d like to discuss the options available to you, contact your adviser.