Self-employed & contractors
Your income may be complex. Your mortgage does not need to be.
Company directors, sole traders, contractors and freelancers can be assessed very differently from one lender to another. Our advisers help identify how your income may be viewed and which lending routes may be appropriate.
Income
Understand the structure
Lender criteria
Find the right approach
Self-employed borrowing
The challenge is often not your income. It is how the lender interprets it.
Two lenders can look at the same business owner and arrive at very different affordability figures.
One lender may focus on salary and dividends. Another may be willing to consider the underlying profitability of the business. Contractors may also find that some lenders assess their annualised contract value while others use historic taxable income.
Understanding those differences before applying can help identify lenders whose criteria better reflects the way you actually earn your income.
Who we help
Different ways of working require different lender approaches.
Self-employed does not describe one type of borrower. The structure and evidence behind the income can differ significantly.
01
Company directors
Directors may receive income through salary, dividends and, in some cases, retain profits within the company rather than drawing all available earnings.
02
Sole traders
Lenders commonly assess sole-trader income using taxable profits, although the number of years of trading history required can vary.
03
Contractors
Some lenders may assess contractors using annualised contract income, while others use a more conventional employed or self-employed approach.
04
Partners
Partnership income can require assessment of the applicant's share of profits together with the history and structure of the partnership.
05
Freelancers
Freelance income can come from multiple clients or contracts, making the pattern, history and evidence of earnings particularly important.
06
Multiple income sources
Clients may combine employment, company income, contracting, investment or other earnings that different lenders assess in different ways.
Company directors
The income you draw may not tell the full story of the business.
Many company directors deliberately leave profits within their business rather than withdrawing everything as salary or dividends.
This can mean that a lender using only personal drawings sees a different affordability position from one prepared to consider a broader view of company profitability.
Discuss your circumstances
Common approach
Salary + dividends
Alternative approach
Wider company profits
Income assessment
The same income can be assessed in several different ways.
The most appropriate calculation depends on your employment structure, trading history and the lender's individual criteria.
01
Salary & dividends
Many lenders assess company directors using salary plus dividends drawn from the business.
02
Salary & share of profit
Some lenders may consider a director's share of company profit rather than relying only on dividends actually withdrawn.
03
Retained profits
Depending on the lender and circumstances, profits retained within a company may sometimes form part of the affordability assessment.
04
Contract value
Certain lenders may assess eligible contractors using their current day rate or contract value rather than historic taxable income alone.
Contractors
A contract can sometimes tell lenders more than historic accounts.
Contractors can be assessed in different ways depending on their industry, contract structure, trading vehicle and history.
Some lenders may calculate income using an eligible day rate or current contract value, while others may rely on salary, dividends or historic taxable income.
Trading history
A shorter trading history does not always mean you need to wait.
Lenders differ in how much self-employed history they require.
Some lenders prefer two or more years of accounts or tax records, while others may consider a shorter trading history where there is sufficient evidence of income and the wider case is appropriate.
Previous employment in the same industry, the strength of the business and the consistency of current earnings may also be relevant depending on lender criteria.
The key point
The number of years you have been self-employed is only one part of the lender's assessment.
Preparing your application
Good preparation can make underwriting more straightforward.
The exact documentation required depends on your income structure and the lender selected, but having the right information available early can help the application progress.
Company accounts
SA302s or tax calculations
Tax year overviews
Business bank statements
Current contracts
Payslips
Personal bank statements
Company information
How we work
Understand the income before approaching the lender.
Our process starts with understanding how you earn your income and how different lenders may interpret it before an application is submitted.
Understand your income
We begin by understanding how you work, how your income is generated, the structure of your business or contract work and the borrowing you are looking to achieve.
Review the evidence
Your adviser reviews the income evidence available, which may include accounts, tax calculations, company information, contracts, payslips or other supporting documentation.
Research lender criteria
Different lenders assess self-employed and contractor income in different ways, so we consider which approaches may be more appropriate for your circumstances.
Structure the application
Once a suitable route has been identified, we prepare the application around the lender's requirements and the way your income is assessed.
Manage underwriting
Our adviser and administration team remain involved throughout lender queries, valuation and any additional underwriting requirements.
Complete
We continue to support the case through mortgage offer and the wider transaction through to completion.
Lender access
Different lenders can produce very different outcomes.
The way a lender treats salary, dividends, profits, contract income and trading history can materially affect affordability. Our lender access includes mainstream banks, building societies, specialist lenders and private banks.
Lender availability and suitability depend on individual circumstances and lending criteria.
Why Intra
Advice built around how you actually earn your income.
Self-employed and contractor applications can benefit from understanding lender criteria before the case reaches underwriting.
01
Understand your structure
We establish whether income comes from salary, dividends, profits, contracts, partnership earnings or multiple sources.
02
Research lender treatment
Different lenders may calculate the same income in very different ways.
03
Prepare the evidence
We help identify the documentation likely to be required for the selected lending route.
04
Manage the application
Our administration team remains involved through underwriting, valuation, offer and completion.
Related mortgage requirements
Explore related borrowing circumstances.
Professionals
Professional Mortgages
Advice for professionals whose current and future earnings may require a more considered lender approach.
Higher-value lending
Large Mortgages
More substantial borrowing across mainstream, specialist and private-bank lending routes.
Existing borrowing
Remortgages
Review your existing mortgage and consider the options available when your circumstances or current deal changes.
Frequently asked questions
Self-employed mortgage questions.
These answers are general. Your options will depend on your income structure, trading history and lender criteria.
01Can I get a mortgage if I am self-employed?
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Can I get a mortgage if I am self-employed?
Yes. Self-employed applicants can access mortgages from a wide range of lenders. The important difference is how the lender assesses and verifies your income.
02How many years of accounts do I need?
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How many years of accounts do I need?
Requirements vary between lenders. Many lenders prefer a longer trading history, while some may consider applicants with a shorter period of self-employment where the wider circumstances support the application.
03How is a company director's income assessed?
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How is a company director's income assessed?
Different lenders use different approaches. Some assess salary and dividends, while others may consider salary plus a share of company profit or, in certain circumstances, retained profits.
04Can retained profits be used for a mortgage?
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Can retained profits be used for a mortgage?
Potentially. Some lenders may take retained company profits into account for company directors, although eligibility and calculation methods vary between lenders.
05Can I get a mortgage as a contractor?
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Can I get a mortgage as a contractor?
Yes. Contractor mortgages can be assessed in several ways. Some lenders may annualise an eligible day rate or contract value, while others assess the applicant using conventional employed or self-employed income.
06Can I get a mortgage with only one year of accounts?
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Can I get a mortgage with only one year of accounts?
Potentially. Some lenders may consider applicants with a shorter trading history, although the options available depend on the business, income history, previous employment and wider circumstances.
07What documents will I need?
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What documents will I need?
The documents required depend on how you earn your income and the lender selected. They may include accounts, tax calculations, tax year overviews, contracts, bank statements, payslips and company information.
Your home or property may be repossessed if you do not keep up repayments on your mortgage or other loan secured upon it.
Self-employed borrowing
Tell us how you earn. We'll help explain how lenders may see it.
Speak with an Intra adviser about your business, contracts, income history and mortgage requirements.
enquiries@intra-pf.com