Five self-employed mortgage myths

By Tom Little on 8 September 2017

Being self-employed doesn’t make getting a mortgage a distant dream - in fact, it might be a lot easier than you think.

Here’s five mortgage myths that business owners need to forget…

1. I’ll need a large deposit
There is no reason why a self-employed person will need a larger deposit than anyone else. However, as with any mortgage the larger your deposit, the cheaper your mortgage rate will be.
Mortgages are categorised according to their loan-to-value (LTV). This means the percentage of the mortgage as a value of the property.

2. I won’t be able to get the same products
Self-employed mortgages at The Cumberland are exactly the same as employed mortgages. This means that our full range is available to you and there isn’t a separate range of self-employed mortgages with higher interest rates and product fees. The only difference for a self-employed mortgage applicant is in the proof of income you will need to supply.

3. I will need to show three years accounts
You don’t need to show us three years of accounts to get a mortgage. But what we do need is the last three months business or personal bank statements, and your last 2 full years audited or certified Accounts.
Full information on what information you need to provide is available here.

4. It will be even harder to get a mortgage if I’m a contractor
This isn’t strictly true. As a local organisation ourselves we know that every business in our area is unique, which is why we don't have a one-size-fits-all approach to mortgage lending.
This means that we are able to take the time to look at your specific circumstances if you are a contractor.
The same range of mortgages offered to residential customers is available to you as well.

5. Self-certification is my best route
In the past self-certification might have been an option but this loophole was closed in 2011. For those that don’t know, “self-cert” loans were devised in the last housing boom as an alternative whereby lenders accepted the borrower’s word. These were abolished in the wake of the financial crisis.

I'm self-employed and I need a mortgage.