Being your own boss undoubtedly has perks – flexibility, independence, and (hopefully) financial reward. But when it comes to applying for a mortgage, does having a business make things more complicated?
The short answer is: not necessarily. Having a business shouldn’t stop you from getting a mortgage, but it does change how lenders assess your application. It may be necessary to contact specialist lenders that cater to the self-employed, which is why working with an independent mortgage broker can be a good move.
Let’s look at how your business accounts, income structure, and financial stability play into the mortgage application process – and what you can do to improve your chances of securing the best mortgage rate.
We specialise in mortgages for company directors and other professionals and can help you find the mortgage you deserve. For one-to-one mortgage advice, contact the experts at Goldmanread.
How your business accounts impact your mortgage approval
When it comes to mortgage approval, lenders want to be confident that you are financially stable. As a salaried employee, this is clearly evidenced by payslips and employment status checks. But what if you’re self-employed?
Lenders will look to your business accounts to asses your affordability.
They usually want to see the following:
- Business accounts (usually 2–3 years) – ideally prepared by a qualified accountant
- Tax calculations and SA302s from HMRC – these reflect your declared taxable income
- Personal and business bank statements – to show money in and money out
- Consistency of income and business stability – steady income is reassuring to lenders
The more evidence you can provide to show a reliable income, the better. A good credit history can also go a long way.
While the process might involve more paperwork, it doesn’t mean your mortgage options are limited. In fact, there are many lenders who specialise in mortgages for self-employed people.
Is it harder for a self-employed person to get a mortgage than for an employed person?
Not harder, just different. Lenders don’t reject business owners on the basis that they are self-employed. Instead, they will look at other sources to see if your income is stable, ongoing, and enough to cover your mortgage payments along with your other financial commitments and living expenses.
Most lenders will also examine your debt-to-income ratio, i.e., how your monthly repayments and debts compare to your income. A high debt-to-income ratio can affect your borrowing potential, regardless of whether you’re self-employed or not.
Experienced mortgage brokers like Goldmanread can be a big help in this area. They know which lenders are most flexible when it comes to self-employed income and can steer you towards the best ones for your circumstances. That includes both high street banks and specialist lenders.
What do mortgage lenders need to see from business owners?
Let’s break down the key areas that lenders will look at when reviewing your mortgage application as a business owner.
Stable and consistent income
Self-employed people often have inconsistent income. So, most lenders like to see two or three years of certified accounts or tax returns. Depending on the lender, they may average out your earnings across the years or take the latest year as a benchmark.
If you’ve had a particularly good or bad year, it’s worth being upfront and explaining why – maybe you’ve secured upcoming contracts or expanded the business, or perhaps you took time off for health reasons.
Specialist lenders often have more lenient lending criteria and will look beyond the surface numbers to understand the full picture of your business’s income. Unlike many mainstream lenders, they may consider just one year of accounts if the business is financially healthy, or take future contracts into account.
They may also consider your salary and dividends more holistically, looking at your overall net profit and even retained profits in the company if you’re a director of a limited company. This can be especially helpful if you leave money in the business rather than paying it out, as many directors do for tax efficiency.
In short, specialist lenders adopt a more flexible, case-by-case approach, so being transparent and providing proof can really improve your chances of securing a mortgage.
Well-prepared accounts
While income consistency is important, how your business finances are presented can make a big difference. Having your company accounts prepared by a qualified accountant adds credibility and reassures lenders that your figures are accurate, compliant, and professionally reviewed.
Lenders prefer clear, well-organised, and timely accounts, especially if your income is complex. This is important if you’re a limited company director, as lenders will want to see how your salary and dividend payments are structured.
Professionally prepared accounts can make it easier for them to understand how your income supports your mortgage repayments.
Deposit
As with any mortgage application, the size of your deposit affects the deals available to you. A larger deposit reduces the lender’s risk, which can open up more attractive mortgage terms.
Ideally, you should have at least a 10% deposit, but 15% to 20% can reduce the interest rates significantly.
Credit score
A good credit score is as important as your income. Lenders will look at your credit report to see if you’ve managed your personal finances responsibly. Missed payments, defaults, or a poor credit score can make lenders cautious.
Before applying for a mortgage, it’s important to check your credit report in case there are errors. You should also take steps to improve your credit rating if necessary. Paying off existing debts, registering on the electoral roll, and keeping credit card balances low can all help.
You can check your credit file with one of the three main providers, Experian, Equifax and Transunion.
Applying for a self-employed mortgage? Goldmanread can help
Running your own business doesn’t mean putting homeownership dreams on hold. With the right preparation, clear financial records, and the right support, you can absolutely get a competitive mortgage.
At Goldmanread, we specialise in self-employed mortgages, with specialist advice for your unique financial situation.
Whether you’re a sole trader or running a limited company, we’ll guide you through the mortgage application process, help you present your finances clearly, and find lenders who get what you do.
Not only will it save you time and effort, but we also have access to mortgage products that aren’t available directly to borrowers.
Get in touch with Goldmanread today to explore your options.
How many years of accounts are needed for a self-employed mortgage?
Most lenders want at least two years of accounts or tax returns. A few specialist lenders may accept just one year, especially if you have strong projected earnings or a good track record. Having three years of records gives you access to the most mortgage products.
Can I get a mortgage if I only recently started my business?
Yes, but it’s a bit trickier. Self-employed mortgage applicants with less than a year of trading history will have fewer options, but it’s not impossible. Lenders may look at your previous employment, savings, or projected income. Working with a mortgage broker like Goldmanread gives you the best chance of finding an appropriate lender.
Will a business loan affect my personal mortgage application?
If you’ve taken out a business loan for which you are personally liable, lenders will factor that into your financial commitments and monthly repayments. However, if the loan is solely in the business’s name, some lenders may overlook it.
Can I use retained company profits in my company to qualify for a larger mortgage?
Some lenders will consider retained profits in addition to your salary and dividends, especially if you own 100% of the business. Others won’t. It’s a good idea to speak to a mortgage broker who can identify which lenders take a broader view of your company’s profits.
Are company directors considered self-employed?
Generally, yes – company directors are usually considered self-employed by lenders, even if they pay themselves a salary and dividends. That means you’ll be expected to provide similar documentation: accounts, tax year overview, and evidence of your dividend tax.
