Joint Mortgage One Self-Employed

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Joint Mortgage One Self-Employed

Applying for a joint mortgage is a great way to increase your borrowing potential and buy a higher priced home. But how does it work when one of the applicants is self-employed?

Can you get a joint mortgage with someone who is self-employed?

It’s very common for joint mortgages to include one, or even two, self-employed applicants. Some self-employed people find they have better success when applying with someone with a PAYE income, especially if they have credit issues.
You will have access to the same mortgage lenders and products as anyone else. As part of the mortgage application, the lender will assess your income, outgoings and take a look at your credit scores.

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

Mortgage lenders will generally base the loan amount on your combined income, multiplied by four or five, depending on their criteria.
So if you earn £40,000 on PAYE and your Self-Employed partner earns around £30,000 per year, your combined income is £70,000. You could therefore potentially borrow up to £350,000 on a mortgage.
Talk to a mortgage adviser or use a mortgage calculator to understand what this loan amount might mean for the repayments on your mortgage, and make sure they are comfortably affordable.

What documents do you need for a joint self-employed mortgage?

The mortgage lender will ask for different proof of income for each applicant. The employed person will usually need to provide a few months worth of payslips to confirm their salary.
Meanwhile, self-employed people often need tax records or company accounts for the past one to three years.
Both applicants will need certain personal information too, including proof of ID via a passport and driving licence, recent bank statements and proof of address.

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How does it work for a Sole Trader / Contractor / Limited Company?

The documents you need can vary by lender and also by your business set-up. 

Sole traders usually need to supply one to three years’ tax details, such as the SA302 self assessment form, stating your annual earnings. 

Limited Company Directors often need one to three years of accounts. Check whether the lender will accept net profit in your business as well as salary and dividends, as this can often mean you can borrow more.

Contractors are sometimes assessed as sole traders or limited companies, but some lenders will accept your day rate as the basis of your income, along with proof of contract.

Does a mortgage have to be in joint names?

It is your decision whether to apply for a mortgage jointly or as a single applicant. Applying together often increases your total loan amount, which is why it is a popular approach.
If you are both going to be paying the mortgage, it is best to name both parties on the mortgage so you can share the equity.
It is possible to name just one person on the mortgage but two people on the deeds for the property, but not all mortgage lenders will allow this.

How can a Mortgage Broker help me?

Seeking advice and support from a Mortgage Broker like First Thought Financial Services will make it much easier to compare your mortgage options and find a deal that works for your specific situation.
Every lender is different and has their own criteria around who they will lend to and how much they offer. We make it easy to explore how best to approach it. We’re here at every step when you buy a property – setting your budget, getting you a Decision in Principle, applying for the mortgage and chasing everything up.

Your home may be repossessed if you do not keep up repayments on a mortgage or other debt secured on it.

If you are looking for a mortgage or life insurance, call us today on 01923 606808 or complete our short enquiry form.

We’ll be pleased to help you.