Joint Mortgage One Self-Employed, One Employed

What should self-employed individuals know about the income assessment process for a joint mortgage application with an employed person?

Self-employment, and the process for assessing income for a mortgage application, can generally be broken down into three main types:

• Sole Trader: Lenders will assess your income based on the net profit of the business – your turnover less your expenses.
• Partnership: Lenders will assess your share of the net profit, calculated as above.
• Owner/Director of a Limited Company: Lenders will typically take into account your director’s remuneration combined with either dividends or a share of net profit from the business.

What factors do lenders take into account when assessing the affordability of a mortgage for joint self-employed and employed applicants?

The factors that lenders take into account are exactly the same for employed and self-employed applicants. You’ll still have to pass a credit check. You’ll still have your income and outgoings assessed. These things don’t change, whether one or both of you are employed or self-employed, or if you are a combination.

As mentioned previously, lenders are increasingly asking a few extra questions of self-employed applicants, just to establish the ongoing viability of their self-employment. This is not because they are looking to catch anybody out; rather, they want to ensure that the income information provided is current, and they’re not going to put anybody in a position where they could find themselves unable to pay their mortgage.

Are there any specific types of joint mortgage products designed for situations where only one applicant is self-employed?

There are no mortgage products specifically designed for self-employed individuals. Lenders generally consider self-employed applicants, but their assessment focuses on income and the type of self-employment.

There are lenders out there that will be a bit more generous or have maybe less onerous requirements, but ultimately they’re still lending to both self-employed and employed individuals, and don’t make any exclusions.

Can you benefit from any government schemes when applying for a joint mortgage when one person is self-employed?

Absolutely, yes, you can. All available government schemes – the first home scheme or deposit unlock, for example – would be open to the self-employed.

It is important to remember that the number of available lenders within government schemes is a bit more limited. You may find that you are more restricted in choice depending on which lender we need to go to, based on the fact that you are self-employed and their guidelines for assessing your income.

Are there many lenders or mortgage brokers for joint mortgage applications where only one is self-employed?

All lenders will consider self-employed applicants under their own individual criteria.

When it comes to mortgage brokers, there may be many, but we are confident we’re the best. You should absolutely come and talk to The Mortgage Store.

You’ve demonstrated how a mortgage broker can help – any final thoughts?

The main thing is that we’ll do the hard yards for you. It’s a very difficult marketplace, with lots and lots of different criteria, but because we do it every day, we’re pretty au fait with what can and can’t be done. We know which lenders are going to be amenable to certain circumstances and will provide a better service. So let us do the hard yards for you so you don’t have to.

Also, the more information we have, the better we’ll be able to help you and the more likely you are to be successful.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP WITH YOUR MORTGAGE REPAYMENTS.