30 May 2023

Self-employed with adverse credit struggle to get a mortgage

By Liza Campion, Head of Corporate Accounts, Precise Mortgages

It’s often not easy for self-employed customers to get a residential mortgage, particularly when they've suffered a credit blip in the past. High street lenders frequently view cases of self-employed customers as being unpredictable or complex, so a mark on their credit record could just add to the reasons for them to reject their application.

Most high street lenders may not only require self-employed borrowers to have a good credit score but also to have been self-employed for at least two years. The reality is though that there are still many of them with credit blips or short trading histories who need a mortgage now.

So what do you do if they don’t meet this standard?

Well you could turn to a specialist lender who truly understands their individual circumstances.

If you have a customer who’s classed as self-employed and could benefit from the assistance of a specialist lender, Precise Mortgages could help.

We’re committed to supporting self-employed customers every step of the way.

Our range of products has been designed with them in mind and we could support those who’ve felt underserved by high street lenders.

With our clear criteria and straightforward approach, we don’t see self-employment as too complex or demanding but instead look to help these customers achieve property ownership wherever possible.

If your customer hasn’t been self-employed for at least two years that doesn’t have to stand in the way of them securing the mortgage they need. Unlike many high street lenders, we’ll consider applications with only one year’s accounts which can be the first financial year of trading for the company, or Tax Calculation.

We’ll also consider defaults, CCJs and secured and unsecured arrears for self-employed customers with adverse credit.

And we’ll accept car allowance and 100% of their pension contributions as part of their total annual income, offering your self-employed customers an approach that’s more understanding of their circumstances.

We’ll accept the following income for self-employed customers:

  • For sole traders – net profit, private pension payments where declared on their tax calculation (or SA302 for previous years)
  • For partnerships – the relevant share of the net profit
  • For limited company directors – remuneration plus dividends, director’s car allowance, director’s pension payment.

Further details can be found in our residential criteria guide.

If you’d like to find out more about the options available for self-employed customers at Precise Mortgages, speak with your business development manager, call our dedicated support service on 0800 116 4385 or contact us on Live Chat.

Correct at time of print 24 May 2023


For adviser use only. Please note this content has been supplied by our lender partner and as such, is their responsibility. No party shall have any right of action against Legal & General in relation to the accuracy or completeness of the information in this article.