Freelancer Mortgages

A freelancer mortgage isn’t a specific mortgage product but rather a term used to describe mortgages tailored to individuals who work for themselves.

Lenders typically view freelancers differently from salaried employees due to fluctuating income and lack of a fixed contract.

However, many lenders offer mortgage options designed to accommodate self employed professionals.

With the right preparation and mortgage advice, securing a mortgage as a freelancer is achievable.

To prove your income as a freelancer, lenders usually require at least one to three years of accounts, typically in the form of SA302 tax returns, HMRC documents, and bank statements.

You may also need to provide an accountant’s certificate that details your income and expenses.

Showing consistent and stable earnings can strengthen your application, making it easier for lenders to assess your affordability.

Most lenders require at least 12 to 36 months of freelance income to consider your mortgage application.

They generally look for a track record of consistent earnings over this period to get a clearer picture of your financial stability.

However, some specialist lenders may be willing to work with you if you have only one year of accounts, particularly if you can demonstrate a strong financial background or have previous experience in the same field.

The deposit amount required for freelancers is typically similar to that of other borrowers.

Most lenders prefer at least a 5% deposit for a standard residential mortgage, though having a larger deposit (10% or more) can open up access to better rates and improve your chances of approval, especially if your income is variable.

Yes, but options may be more limited.

Lenders usually prefer at least one year of accounts, though some may accept applications from those with six months of trading if they have a strong financial background or a previous stable income.

Lenders typically assess your freelance income by taking an average of your earnings over the past few years, usually using your net profit if you’re a sole trader or your salary and dividends if you’re a limited company director.

They’ll also look at any additional sources of income and consider factors like expenses, outstanding debts, and fluctuations in earnings to determine how much you can afford to borrow.

For a freelancer mortgage, you’ll need SA302 tax calculations, tax year overviews, business accounts, bank statements, savings account statements, a gifted deposit letter (if applicable), photo ID, utility bills, a council tax statement, a credit report, loan or credit card statements, contract details (if applicable), and company documents if you’re a limited company director.

Gathering these documents in advance can help speed up the mortgage process.

Yes, if you work on a contract basis, lenders may take your contract rates into account.

You may need to provide details of your current and previous contracts to show a consistent income stream.

Some lenders will consider your day rate and project this over a full year, which can work in your favour when calculating affordability.

The rates for freelancer mortgages can vary depending on your financial history, the size of your deposit, and the lender’s risk assessment.

In general, freelancers might face slightly higher rates compared to salaried employees, particularly if their income is irregular.

However, with a good credit score, stable income, and a substantial deposit, you can still access competitive rates.

A mortgage broker can help you find the best deals suited to your situation.

Maintaining a good credit score, providing a larger deposit, having a longer trading history, and working with an accountant to prepare clear financial records can all improve your chances of getting a mortgage as a freelancer.

Yes, it is possible to get a mortgage as a freelancer with bad credit, but it may be more challenging.

Lenders will scrutinise your credit history, and those with missed payments, defaults, or other adverse credit may face higher interest rates or stricter lending criteria.

Working with a mortgage broker like us who specialises in bad credit mortgages can improve your chances by connecting you with lenders who are more open to self employed applicants with less-than-perfect credit.

Yes, you can consolidate debt as a freelancer, often through a remortgage for debt consolidation. This involves combining multiple debts into a single mortgage payment, potentially lowering your monthly outgoings.

Lenders will assess your financial situation, including your income, expenses, and credit history, to ensure you can manage the new mortgage payments.

Speak with a mortgage advisor to explore your remortgage options and to find a deal that meets your needs.

The remortgage process for a freelancer is similar to that for other borrowers but requires a focus on proving your income.

You’ll need to gather documents such as your SA302 tax calculations, tax year overviews, business accounts, and recent bank statements to showcase your earnings.

Lenders will assess these documents, looking at your average income over the past few years, along with factors like your expenses, debts, and credit history.

If you’re looking to release equity, consolidate debt, or secure a better rate, a mortgage broker can help you find a lender more accommodating to freelancers and guide you through the application, valuation, and completion stages.

Yes, freelancers can obtain a bridging loan, though approval will depend on your ability to repay the loan within a set timeframe.

Bridging loans are short-term loans used to bridge financial gaps, often when buying a new property before selling the current one.

Lenders will look at your income, assets, and exit strategy, such as selling a property or securing a long-term mortgage, to assess whether a bridging loan is suitable for you.