Being self-employed is exciting—you’re in control of your career and your future. But when it comes to getting a mortgage, things can feel a little more complicated compared to standard PAYE employees. Add in a history of bad credit, and you might feel like the door to homeownership is closed.
Don’t worry—it’s not impossible! High street banks might rely on rigid checklists, but specialist lenders look at your real-world financial situation. Here’s what you need to know to set yourself up for success.
In the mortgage world, “self-employed” is a broad umbrella term. Lenders will assess your affordability entirely differently depending on your specific business and tax structure. To get the most accurate advice for your situation, select the employment type that best describes how you operate:
Most mainstream lenders want to see three full years of accounts to feel confident in your financial stability. But here’s the good news: Some specialist lenders are happy to work with self-employed individuals who have been trading for much less time—sometimes with just one year of accounts or even nine months of trading history!
If you are newly self-employed and only have one year’s worth of accounts, working with a qualified accountant to prepare professional, certified accounts or a year-to-date income overview will vastly strengthen your application.
Lenders want to ensure you are in a position to comfortably repay your mortgage. Because you don’t have standard payslips, you will need to provide concrete proof of your earnings. Typically, lenders ask for:
Lenders will often average your income over the last two years. However, if your profits have increased significantly in the most recent year, specialist mortgage brokers like us know which lenders will use your most recent (higher) year to maximize your borrowing power.
Yes! While having adverse credit and being self-employed might sound like a challenging combination, it does not disqualify you from getting a mortgage. In fact, we have a dedicated guide specifically on securing self-employed mortgages with bad credit.
Specialist adverse credit lenders evaluate the context of your finances. Whether you have missed payments, defaults, or even CCJs, lenders will focus on the age of the issue, the amount involved, and how stable your current business income is.
You may be asked to provide a slightly larger deposit (typically 10% to 15%), but with the right broker presenting your case, approval is entirely possible.
Every career path is unique, and your income structure shouldn’t stop you from securing a mortgage. Whether you are focused on this specific employment type or exploring other ways you earn, Adverse Mortgage Advisors is here to help. Visit our complete employment types support hub to discover how we secure mortgages for contractors, freelancers, sole traders, and the self-employed, even with a history of bad credit.
If you have questions about getting a mortgage with an adverse credit score, read our FAQs. Our wealth of knowledge within this market means that we’re confident in our ability to offer specialist mortgage advice and secure the mortgage you want regardless of your credit history.
Yes. Being self-employed does not stop you from getting a mortgage. Lenders will simply assess your income in a different way compared to someone who is employed. With the right documentation, many self-employed applicants can access the same mortgage interest rates and terms.
Most lenders require at least two years of trading accounts or SA302s (tax calculations and tax year overviews from HMRC). However, some specialist lenders may consider applications with just one year of accounts, especially if you have a strong financial profile or a proven track record in your industry.
Typically, you’ll be asked to provide:
Not necessarily. While some high street lenders may apply stricter criteria, there are many specialist lenders who understand self-employed income structures. A mortgage broker can help present your income in the best way and match you with lenders who are more flexible.
Yes, it may be possible. Some lenders will consider applicants with just 12 months of trading history, especially if you were previously employed in the same field. A specialist mortgage broker can help you find the right lender to suit your circumstances.
