Buy to Let Self Employed Mortgage

For most buy to let mortgages, lenders will require a deposit of at least 25% of the property’s value.

If your income is seen as variable or higher risk due to self-employment, you might need to provide a larger deposit.

The more you can put down, the better your chances of securing a favourable mortgage deal.

While most lenders prefer to see two or three years of accounts, some may consider applications with just one year’s worth of financial records.

This is more likely if your business has performed well in its first year, but the strength of your overall financial position will also be considered.

A mortgage broker can help identify lenders who are more flexible in this area.

The interest rates for buy to let mortgages vary depending on several factors, including your deposit size, income stability, and credit history.

Being self-employed doesn’t automatically result in higher rates, but lenders will carefully assess your financial situation.

A mortgage broker can help you find competitive rates based on your unique circumstances.

Lenders expect the rental income from your buy to let property to cover at least 125% to 145% of the mortgage payments.

This ensures that even if there are periods when the property is vacant or if interest rates rise, you’ll still be able to manage the repayments.

Some lenders may also consider your personal income, particularly if your rental income falls short of their expectations.

If your self-employed income varies from year to year, lenders may take an average of your earnings over the past two or three years.

This helps them get a clearer sense of your overall financial health.

If your income has recently increased, some lenders might also consider just your latest figures, especially if your business is growing.

Yes, retained profits can sometimes be factored into a buy to let mortgage application, especially for limited company directors.

Not all lenders will consider this, but those who do can allow you to borrow more based on the overall financial health of your business.

Clear and accurate business records will make this easier to present.

While a good credit score is important, being self-employed doesn’t mean you need a higher score than someone in traditional employment.

Lenders will assess your credit history alongside your financial documents, so if you have a solid credit record, your self-employed status shouldn’t hold you back.

Many landlords opt for interest-only buy to let mortgages to keep monthly payments lower.

This can improve cash flow, but it’s important to have a plan for repaying the full loan when the term ends.

You’ll need to sell the property, refinance, or switch to a repayment mortgage to clear the debt at the end of the term.

Yes, remortgaging a buy to let property is a common way for landlords to release equity or secure a better mortgage deal.

Being self-employed doesn’t limit your options, as long as you can provide up-to-date business accounts and show steady income from your rental property.

Bad credit can make it more challenging to secure a buy to let mortgage, but there are specialist lenders who cater to applicants with poor credit histories.

While you may need to provide a larger deposit or pay a higher interest rate, it’s still possible to get a mortgage.

A mortgage broker can help you find the right lender for your situation.