Four in ten self-employed consider giving up their business to get a mortgage
Nearly four in ten self-employed people have thought about giving up their entrepreneurial lifestyle just to secure a mortgage. But, with the right preparation and support, securing a mortgage while remaining self-employed is entirely achievable.
By Chase de Vere Independent Financial Advisers, in partnership with IPSE
Buying a home is a major milestone, but for self-employed individuals, securing a mortgage can sometimes feel like an uphill battle. According to recent research from Aldermore Bank, nearly four in ten self-employed people have thought about giving up their entrepreneurial lifestyle just to secure a mortgage. However, with the right preparation and support, securing a mortgage while remaining self-employed is entirely achievable.
Why is it harder for the self-employed?
Traditional lenders tend to prefer applicants with steady, predictable incomes. This puts self-employed professionals at a disadvantage. Aldermore’s study found that 39% of self-employed first-time buyers have been rejected for a mortgage—more than double the rejection rate of salaried employees. Many self-employed individuals, especially those with fluctuating earnings, struggle to meet lenders’ requirements due to income variability and extensive documentation demands.
Instead of payslips, self-employed applicants typically need to provide two to three years of tax returns and supporting documents to demonstrate consistent income. Lenders may also request business bank statements to verify continuity of income, especially for newer businesses. This additional scrutiny can make the process feel more complex, but it’s not insurmountable.
Overcoming mortgage challenges as a self-employed individual
Despite these challenges, there are ways to improve your chances of securing a mortgage. Start by ensuring your accounts and tax returns are accurate and up-to-date. Lenders often require at least two years of consistent financial history, so presenting a clear picture of your income is crucial. Consider working with a qualified accountant to ensure your records are well-prepared, enhancing your credibility with lenders.
Building a strong credit profile is also essential. Before applying, review your credit score and address any potential issues. Reducing outstanding debts and avoiding new loans in the months before your mortgage application can improve your approval chances. Saving for a larger deposit—ideally around 10% to 20%—can also reduce the perceived risk for lenders.
It’s wise to seek specialist advice tailored to self-employed individuals. At Chase de Vere, we understand the complexities of fluctuating income and can connect you with lenders who are more flexible. Our advisers are experienced in supporting self-employed professionals through the mortgage process, ensuring you receive the best advice and options.
Don’t miss out on the best mortgage deals: Try our mortgage reminder service
Securing a mortgage is just the first step—keeping track of your renewal date is equally important. That’s where our Mortgage Reminder Service comes in. This free service notifies you well before your current deal expires, allowing you to explore new options, secure better rates, and avoid paying more than necessary.
There is hope: Homeownership is possible
While being self-employed can make the mortgage process more complex, it doesn’t have to be a barrier to achieving your dream of homeownership. At Chase de Vere, we’re committed to guiding self-employed individuals through the mortgage journey. As an IPSE member, you have access to tailored fee-free mortgage advice that understands your unique circumstances.
If you're ready to explore your mortgage options get in touch with our team today. We’re here to help you secure the home you’ve worked hard for without sacrificing your entrepreneurial aspirations.
Speak to a Chase de Vere mortgage specialist
Disclaimer: Your home may be repossessed if you do not keep up repayments on your mortgage.
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