How to get a mortgage when you’re self-employed

If a traditional, high street lender won’t approve your mortgage application, working with an independent, whole of market broker could help you to achieve a mortgage in principle.

Securing a mortgage can be tough, particularly if you are a first-time buyer, self-employed, or both! The recent pandemic has exacerbated an already tricky situation for some, and in the case of businesses that were forced to shut their doors due to restrictions, the inevitable disruption to income has had a further knock-on effect.

For Jaymin Waterhouse and her partner, working with independent, whole of market mortgage broker NM Finance helped the couple realise their dreams of buying a first home together and get a foot on the property ladder.

“We had been waiting for so long and I was living with my parents when we found a beautiful, two-bedroom period cottage in a development of seven barns in January. I have a hair and beauty company and Max Mace at NM Finance had helped me to secure a commercial mortgage on my business premises. We were very open with the seller, explaining that as I am self-employed and had been forced to close the business due to COVID-19 restrictions, it might be tricky to get a mortgage.

“He was great and suggested NM Finance, whom he had worked with for the development, saying, ‘If anyone can get you a mortgage, Max can’. I couldn’t believe he knew Max too, and this gave me tons of confidence as he clearly has such a good reputation for achieving the seemingly impossible!”

Self-employed mortgage, Norwich

The first-time buyer couple were looking for a 90 per cent mortgage and initially Max managed to secure an 85 per cent loan to value, negotiating with the seller that the additional five per cent could be paid in two years’ time, when the couple remortgaged. The unique arrangement would enable the sale to progress and could only have been achieved by working with an independent broker.

However, as the application progressed, the lender insisted that Jaymin would need to be back at work for three months, a condition which risked jeopardising the long wished-for sale. “Max searched the market again but warned us that the options were getting narrower,” Jaymin adds.

With Jaymin’s business set to reopen as restrictions eased on 12 April 2021, NM Finance went back to the drawing board and managed to secure a 90 per cent mortgage with a different lender. As a condition of the application, the lender asked Jaymin to provide a daily list of any booked clients and income. Submitting management information, the lender accepted the couple’s application in principle four days later and, after just one month, offered the mortgage in full, enabling the couple’s property purchase to progress.

“I was so anxious that the sale would fall through but once we reopened, business boomed and the application was accepted,” says Jaymin. “It was exactly as we had both said, if anyone could do it, NM Finance could! We had so many obstacles and they seemed to have a solution for all of them – even when things were not looking good, they gave us hope saying that if it took a year we would achieve it, but thankfully it took far less time than that.”

Independent mortgage and life insurance advice, Norfolk

“Just because a mortgage application doesn’t work on paper for a High Street lender, it doesn’t necessarily mean that it’s an impossible case,” says NM Finance director Max. “If you use someone who is experienced, takes the time to understand the situation, and has the right connections to reach out to, it can be achieved. Jaymin’s case clearly shows the value of working with an independent broker with access to whole of market.”

“I would far rather work with a local company and have a relationship where you can speak to someone who knows you and your circumstances,” says Jaymin. “It’s also great that they take care of everything and can organise life insurance too, rather than having to shop around, as you know that everything is taken care of properly – the relationship you build makes all the difference and definitely gave us the successful outcome we longed for.”