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Gig worker mortgages

Looking for information about gig economy mortgages? Get the right advice here.

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By Pete Mugleston  | Mortgage Advisor Pete has been a mortgage advisor for over 10 years, and is regularly cited in both trade and national press.

Updated: 22nd August 2019 *

Working in the gig economy - otherwise known as freelancing or contract work - can be liberating, but it can be difficult to get a mortgage with favourable terms. That said, there are providers who will consider you, even if you're at the beginning of your career and have fluctuating income.

Our guide to gig worker mortgages covers the following topics...

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Can I get a gig worker mortgage?

Yes! The advisors we work with specialise in self-employed mortgages and arrange home loans for gig workers every day.

First and foremost, mortgage lenders will want to know which category of gig work you fall into. Broadly speaking, there are three main types of business structures for freelancers in the UK. The one you fall into vastly determines your chance for a mortgage:

  • Sole trader - The business belongs solely to you. 
  • Partnership - This is where you and a partner operate your freelance gig. 
  • Limited company - This is a small private company whose owners are responsible for its debts to the extent of the amount of capital they’ve invested.

Struggling to find a mortgage as a gig worker? Make an enquiry. We will refer you to experts who can help you find a deal that matches your circumstances.

What is the lending criteria for gig economy mortgages?

Once you know the lending criteria for gig worker mortgages, you should have a better idea of whether you’d qualify for one. Most providers look at the following...

  • Your income: At least two years of consistent, if not increasing profit. Records should be accurate and up-to-date
  • Your outgoings: That your expenses don’t outrank your income.
  • Credit history: Some lenders are cautious when it comes to bad credit
  • The financial history of your business: Make sure you repay all debts and try to straighten out, if any, online negative reviews of you and/ or your business.

Most lenders seriously consider those who’ve been self-employed for at least three years and can show steady earnings. With the help of a whole-of-market broker - like the ones we work with - you may find a specialist lender who will consider your application if you’ve got just one year of accounts and a projection of future clients or contracts.

Stricter lenders also want to see your line-up of future clients or contracts to make sure you can afford your mortgage repayment. They may also want to see your training, qualifications, references and existing network. 

How do I prove my income for a gig worker mortgage?

Aside from the regular documents (passport, ID etc.), lenders would also want to see the following:

  • At least two to three years’ accounts including invoices and business bank statements 
  • At most three SA302 forms. All lenders want the most recent tax return, which may mean filing early.
  • Copies of your contracts.
  • An up to date CV. 
  • If you’re a limited company, bring your business accounts and balance the books.

Make an enquiry and we’ll refer you to a broker who knows mortgage lenders who specialises in the gig economy.

How do I boost my chances of getting a gig economy mortgage?

You can increase your chances by hiring a certified or chartered accountant to prepare your records and a whole-of-market broker who can offer professional advice. 

Note: Make your accountant aware that you plan to seek a mortgage, since your they may try to minimise your taxes which could backfire in this situation.

You can speak to a broker with specialist knowledge of the gig economy by making an enquiry.

How is a gig worker mortgage calculated?

Lenders calculate your chances according to your business structure...

  • Sole trader: Lenders consider your net income or average income you’ve earned over the last two to three years. 

  • Partnerships: Lenders consider the net income of both you and your partner or average the income both of you have earned over the last two to three years. 

  • Limited companies: Lenders review your salary and dividends. In some cases, they will assess your salary and the net profit of the company.

Can I get a gig economy mortgage with fluctuating income?

Yes. If you’re the typical freelancers with fluctuating income, your lender will take the most recent year as an indication of your earning capacity and give you a smaller loan. They may use the year with least income as their baseline instead.

How to get a gig economy mortgage

You should kick off your application by making an enquiry here to speak with a whole-of-market broker. The ones we work with have expert knowledge of the gig economy and know exactly which lenders offer the best deals for those who work within it.

You're more likely to get a gig worker mortgage if you have:

  • A Healthy deposit: Anywhere from 10% to 25% helps. The larger the deposit, the more likely you’ll receive a favourable loan.

  • Show consistency with contracts: The more regular your gigs, the better your chances. Aim to avoid gaps between gigs, at least 12-24 months before applying for a mortgage. Look for long-term engagements and/ or repeat business and regular transactions.

  • Meticulous records: Have all your accounts, paperwork, electronic readers up to date and accurate. 

  • Enough income to cover your mortgage: Either cut your expenses and/ or limit your mortgage.

  • A good credit rating 

  • A specialist mortgage broker: These know the ins-and-outs and are close to bankers. Of course, that's where we come in. We can refer you to experts who may match you to your perfect provider

Speak to an expert gig worker mortgage broker

For low-risk borrowers, it’s extremely possible to get a loan on a residential property with as little as 10% deposit.  Moderate risk-borrowers may have a slightly more difficult time.

Regardless of your situation, we can refer you to experts who can match you to lenders that offer mortgages for gig workers.  Call us today on 0808 189 2301 or make an enquiry.

Then sit back and allow us to do the hard work in finding the right mortgage advisor for your situation. We don’t charge a fee and there are no obligations.

Updated: 22nd August 2019
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FCA disclaimer

*Based on our research, the content contained in this article is accurate as of most recent time of writing. Lender criteria and policies change regularly so speak to one of the advisors we work with to confirm the most accurate up to date information. The info on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisors working with us are fully qualified to provide mortgage advice and work only for firms who are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs. Some types of buy to let mortgages are not regulated by the FCA. Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.

Find out more about self employed mortgages

Self Employed Mortgages