Mortgages for self-employed social media professionals

Being a self-employed professional, especially one who is earning income from reasonably new platforms such as YouTube or OnlyFans, can make applying for a mortgage a terrifying prospect. However, we’re here to tell you that, while it is technically true that some mortgage lenders prefer customers who are in full-time employment, there are so many options available to those of you who are self-employed, no matter your trade.

It’s also important to note that even if you have had a mortgage declined by a lender or underwriter previously, that with the right advice you can still get a self-employed mortgage.

Getting to grips with a self-employed mortgage

So, what is a self-employed mortgage? Well quite simply, it is a home loan for anyone who trades in a self-employed capacity – this includes those who freelance, are consultants or who use platforms like YouTube, Twitch or OnlyFans as their main source of income.

Self-employed mortgages don’t drastically differ to a regular mortgage product, however some mortgage lenders specialise in serving self-employed people so you’ll want to make sure you go to one of these lenders. 

What do I need for a self-employed mortgage?

There are a few things you will need to make sure you have for a self-employed mortgage, which we have listed below:

• Proof of income:
  Many lenders you approach will want to see at least two or three years’ worth of your accounts. Don’t panic if this isn’t you however, as there are those out there that will consider self-employed mortgage applicants with less than two years’ accounts, under the right circumstances.
• Your deposit:
  Deposit requirements for self-employed mortgages are basically the same as other residential agreements. Most lenders will expect you to put down at least 10% of the value of the house you’re looking to buy, but this amount could be increased depending on whether your mortgage lender deems you a potential risk. For example, if you only have one year’s trading history, the lender will likely ask you for a higher deposit to offset the risk. Flexible lenders or schemes, such as Help To Buy, will enable some low deposit deals.
• Clean credit:
  Those of you who have bad credit could find it more difficult to secure the mortgage you want (albeit it will not always be impossible). Some mortgage lenders tend to turn anyone away who has had credit problems, however with the help of a whole-of-market broker, it is certainly possible for you to find a lender who will accept self-employed customers for a bad credit mortgage. In the meantime, there are many things that you can be looking to do to boost your credit score, such as closing credit accounts you no longer use, or making small purchases with a credit card and paying the balance at the end of each month. Even things like ensuring you’re listed on the electoral register can help towards a more positive credit score.

It’s worth noting at this stage that some mortgage lenders impose age restrictions on self-employed mortgage products. Most are wary if the mortgage term ends past your 75th birthday, although there are some that will agree to lend to customers aged 85 and a smaller amount won’t have any age restrictions, under the right circumstances.

I’ve only been self-employed for a year; can I get a self-employed mortgage?

Most mortgage lenders will be looking for at least two to three years’ worth of accounts, however not all is lost. There are lenders who will consider applications with accounts equalling just nine to 12 months, however you may also need evidence that your income is sustainable to get approved.

If you are newly self-employed, you may have to wait until you’ve been working in your field for at least nine months before you consider enquiring about a mortgage product.

How much will I be able to borrow?

The amount you’ll be able to borrow for a self-employed mortgage is based on a multiple of your average earnings. Not every provider uses the same calculations; some will multiply your average earnings by 4.5 whereas some will stretch this to 5 and a small minority may even go as high as 6 times your average earnings.

If you’ve had one strong year but your average income over the last three years is lower when the previous two are factored in, you could look at using a whole-of-market broker, who can help find a lender that offers mortgage products based on just one year’s worth of accounts.

How do I prove how much I am making?

You’ll need to provide your lender with a SA302 self-assessment tax returns, finalised accounts or projected accounts.

Some of the more flexible lenders may consider accepting payslips from your company or family company, or even handwritten payslips if you are paid in cash.

So how do I get the best rates

As with any mortgage, you’ll want to save up as much of a deposit as possible, make sure your credit score is in good shape and, ideally, collect two to three years’ worth of accounts. The more boxes you can tick, the more lenders you will have available to choose from and the better your offered rate will be. Applying through a mortgage broker who specialises in self-employed applicants and knows the market inside out can also boost your chances of landing the best interest rates available.