Joint Mortgage when One Applicant is Self Employed

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Looking to make a joint application for your mortgage usually means that you can increase the amount you can borrow to put towards buying your home. In most cases, the process is pretty straightforward and preparing to take on a joint mortgage is similar to getting a sole mortgage.

If one of the applicants is self-employed, this does mean you need to be more careful when applying for a joint mortgage than if you are both PAYE applicants. Joint mortgages where one applicant is self-employed aren’t impossible, however, you will need to be more prepared than if both applicants are employed.

Can you get a joint mortgage if one applicant is Self Employed?

The simple answer is yes; you can get a mortgage when one applicant is self-employed. The process for self-employed mortgages isn’t wholly different to that which most people perceive to be a regular mortgage application. Self-employed mortgage applicants do need to follow stricter criteria and make sure they have a complete history of the company’s accounts.

For applicants where one party is self-employed, specifically as a subcontractor who has paid into the Construction Industry Scheme, it need not be an automatic “no” due to your circumstances. We are experts in this field, and our friendly team has experience of dealing with circumstances such as yours to help you prepare and be accepted for a joint mortgage with many mortgage lenders.

How much can you borrow if one applicant is self-employed?

The same factors apply for self-employed people applying for joint mortgages with an employed person as if both applicants were employed. A decision on how much a self-employed person can borrow for a mortgage depends on the following factors;

  • Deposit amount
  • How much you can afford to repay
  • Credit history and credit score for both applicants
  • Property type
  • Income status

A joint application will allow you to increase your borrowing. The final sum is one that takes into account all of the above details and how much you can comfortably afford to repay alongside all of your other outgoings.

What documents do you need if one applicant is self-employed (Sole Trader/Contractor/Limited Company)

There are around 5 million self-employed people in the UK. Many people are under the impression that irregular work hours and income will lead to an automatic refusal of a mortgage outright and a high interest rate. Despite research showing that 50% of mortgage applications are turned down for reasons relating to self-employed statistics or contractors, being self-employed isn’t a reason not to apply for a mortgage.

Applying for a joint mortgage where one applicant is self-employed isn’t something that should be dismissed. In fact, many self-employed people successfully obtain mortgages. You can still apply for a joint mortgage with one person self-employed and one as a PAYE applicant with the following documentation;

  • Two or more years accounts (in some cases we can help if you have less than one year’s records but have paid three months continuous CIS payments and do not have a bad credit history)
  • SA302 forms or a tax year overview (from HMRC) for the past two or three years
  • Evidence of upcoming contracts (if you’re a contractor)
  • Evidence of dividend payments or retained profits (if you’re a company director)

You will also need the following information too;

  • A valid passport
  • UK driving licence
  • A recent council tax bill
  • Utility bills dated within three months
  • Six months of bank statements

You may also need to discuss spending habits, holidays, hobbies, credit card repayments, car finance, pets and childcare spending. Get all of this information ready and make sure your bank statements show you have borrowed responsibly and made payments made on time for the minimum, or above minimum sums. These can help increase your chances of being accepted on your first mortgage application.

Does a mortgage have to be in joint names?

Not all mortgages need to be in joint names. You can be the sole applicant for a mortgage application. A joint mortgage means that both parties applying for the mortgage will have their names on the documents, and both will be liable for making all the repayments on your mortgage.

When one applicant for a joint mortgage is self-employed, you may feel that it is easier to apply as a sole applicant. The amount you will be able to borrow will be considerably less than a joint application even if one person is self-employed.

While the process is slightly different for preparing a mortgage for a joint self-employed application, it doesn’t mean you should avoid applying for a joint mortgage in these circumstances. At CIS mortgages, we have advisors on hand who are expertly trained to give mortgage advice, help guide you through the mortgage application and help you be successful with your mortgage application first time.

How can a Mortgage Broker help if one applicant is Self Employed

For couples looking to take out a mortgage where one applicant is self-employed, hiring a mortgage broker who is authorised and regulated by the Financial Conduct Authority can prove to be beneficial. Look for a self-employed mortgage broker specialist who will have in-depth knowledge around mortgages for self-employed applicants.

An experienced mortgage broker will know exactly what information and documents you will need to have ready for your application, as well knowing which lenders are best for your particular circumstances.

Another benefit of using a mortgage broker for a joint application with one self-employed party is that they can help to maximise your chances of being approved the first time. One refused mortgage application won’t particularly damage your credit rating but a succession of them will. Hiring a specialist  mortgage broker for self-employed mortgage applications can be a boost to getting your application approved quickly with the right lender.

We have helped hundreds of CIS subcontractors obtain a mortgage. If you’re unsure if you will qualify for a mortgage for any reason, including having less than three years worth of self-assessment records, poor credit history, or you have a high day rate but low net profit, our fee-free advice service can help you.

We Say Yes To CIS

Less than 1 year self-employed

5% Deposit

Less than 3 years in the UK

High day-rate with low net profit