There are almost 2.2 million freelancers working in the UK, with an ever-increasing number of workers – the UK is ranked second on the top 10 list of freelancing countries with a 59% year on year revenue growth.
Good news for mortgage brokers who know their self employed criteria!
Here’s what we offer for your freelance and self employed clients, or if you have a case in mind get in touch so we can help.
Salary and dividends / salary and net profit.
We will accept the higher of Salary and Dividends or Share of Net Profit after tax PLUS salary.
We can take this to age 75 if non-manual or 70 if manual work.
For non-active directors we can look to accept this income in retirement if your client continues to receive income from a business they no longer have an active role in, and in addition to pension, investment and property income that your client may receive.
Self employment as additional income
If your client is employed but they have additional self employment income we’ll take 50% of this for affordability, if there is a 2 year history (plus they’ll need to show this income is sustainable and not just for building their deposit).
We require a minimum of two years’ accounts.
We will use the latest years figures if the increase is less than 20%. If it is more than 20% we take an average of the last 2 years.
If accounts are over 9 months old an accountants reference will be required. The accountant will need to have a qualification which is acceptable to use, please contact us for further information.
If the applicant doesn’t use an accountant we will use the SA302’s assessed on an individual basis.
Recent change in status – limited company
We can potentially accept an application where a change in self employed status has taken place recently such as a Sole Trader becoming a Limited company. We will require at least one years accounts under the new status. Not acceptable if there is a change in shares and structures.
We are happy to consider cases where your client has taken Government support during the pandemic, and/or had a challenging 2021 due to the impact of Covid. In both cases, and others, please contact us to see if our manual underwriting means we can assist your client.
Helpful guidance for your freelancer clients.
We’ve put together some useful tips for your freelancer clients, to help them understand the self employed mortgage market and what they can do to prepare for their application.
Plus, this article includes our belief that having a mortgage broker on hand can be especially helpful!
Get in touch.
Whilst we can’t list everything we accept, or the conditions which apply, we’re on hand to help! If you want to find out more give us a call on 0330 123 1073 (option 1).
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