standard Sole Trader Mortgage

Damian Youell

I’m Damian Youell an experience mortgage broker with over a decade of experience. I’m dedicated to helping clients by offering an efficient and friendly service.

Over the years we have streamlined our systems and procedures and adapted processes to enable us to make the whole process very straight forward and easy for our clients.

We pride ourselves on being very approachable feel free to contact me:

Sole Trader Mortgage

A sole trader is someone who runs their own business and are self-employed. They are able to keep all the post-tax profits from the business, but it means they are also legally responsible for all aspects of their business and personally liable for the finances of the business.

Many sole traders will approach their high street bank and be declined or told they don’t qualify for a mortgage. This does not necessarily mean you won’t be able to get a mortgage at all, and it’s about finding the right lender and the right type of product. You may require a specialist lender that you can’t access on the high street. A mortgage broker can use their knowledge to help you identify which lender is right for your own personal circumstances and get you the most suitable deal for you.

Post Topics

Can a sole trader get a mortgage?

How to get a mortgage as a sole trader?

What documents will be required?

Next steps


Can a sole trader get a mortgage?

You may be a sole trader and have been declined a mortgage from your local high street bank or turned away and told you won’t be able to get a mortgage. However, don’t be disheartened as this isn’t always correct. High street banks may have branch staff working there that are only taught to take a certain approach when it comes to calculating affordability that is fine for a standard normal mortgage application but isn’t flexible enough when it comes to calculating for a sole trader’s financial accounts.

Traditional banks are starting to change their approach as a large proportion of the workforce is self-employed and the pool is steadily growing but there are specialist lenders that are not on the high street which can be considered too.


How to get a mortgage as a sole trader?

There are several factors lenders will check for before approving a mortgage. Not all lenders will have the same criteria’s and requirements which is why a mortgage broker might be handy to be able to match which lender you are most suited to base on their experience. An agreement in principle will confirm the mortgage loan offer you are able to receive and it can be handy to have this before searching for a property.

Similarly, to a standard mortgage applicant, a sole trader will be required to go through the standard checks, such as income assessment, affordability and checking their credit report.

Sole traders will need to file for self-assessment which can be done yourself through HMRC or hire an accountant which will illustrate your income levels. An SA302 form can be requested once this has been filed. Generally, lenders will require the latest two years of self-assessment although each lender can very between requesting for one to three years of your self-assessment. They will compare the net profit from your business to your outgoings to work out your affordability which will indicate to them how much you can afford for your monthly mortgage repayment and loan you an amount for your mortgage according to this.

Having a healthy credit score is a good indication to a lender how reliable of a borrower you are, so it is a good idea to check your credit score yourself so you can see if there are any discrepancies in your credit history or make improvements before applying for a mortgage. Some lenders may lend to borrowers if they have adverse credit, but this will be judged on a independent basis and will depend on the type of adverse credit.

You will be required to have a deposit just like any other mortgage applicant, and generally speaking you be required to have 5% – 10%. In some cases, lenders may require for you to have a bigger deposit if they are not completely satisfied with your application and having a larger deposit will lower your loan to value ratio (LTV) which is always more appealing to lenders as it is less risk for them to loan for a mortgage.


What documents will be required?

• Wage slips (3 to 6 months depending on the lender) or self-assessments SA302 (2 to 3 years depending on the lender)
• Contracts (12 months) if you are doing contractual work
• Valid photographic ID such as passport or driving license.
• Proof of address such as a bank statement, utility bill or council tax bill.
• Bank statements (3 months)
• Evidence of your deposit


Next steps

Getting a mortgage as a sole trader may not be as straight forward of a process when compared to normal standard applicants. Seeking professional advice can help save you time and effort and a whole of market mortgage broker can access a wide range of lenders from the whole of market to recommend you the right deal for your own personal situation and circumstances. Get in touch with us today to start your mortgage process.

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