It is possible for self-employed people to get a mortgage but it can be more complex than a standard mortgage application, depending on the nature of the business and the business structure i.e. company, partnership or sole trader.
Engaging a mortgage solicitor in London who is also skilled in other areas of law, such as Saracens Solicitors, can be helpful when unravelling all the technicalities of a self-employed mortgage application. Whilst the solicitor cannot advise clients on what mortgage to take out, they can give them clarity around their various legal positions.
Sole traders need a minimum of two years’ worth of accounts, an accountant, a deposit, and evidence of regular work.
If someone is in a partnership, only their share of the profits will be considered and not the overall business turnover. They need to ensure that they have clear documentation in place that provides this information.
Where an individual is a director or shareholder of a limited company, they will usually have a regular salary or dividends. The company itself cannot have anything to do with their mortgage application.
There are other forms of self-employment but, in essence, the mortgage company will want to know how much someone earns but more importantly, how secure their income is, and whether they are a good candidate for the loan.
How a mortgage solicitor in London can help
It is advisable to enlist the help of professionals for the technical areas of a mortgage application, if it is likely to get complex. This is particularly the case if the property is going to be part-owned or utilised by the business that the client is involved in. Once the sale has begun, a mortgage solicitor can usually assist with the conveyancing process as well. This will include exchange of information, contracts, and monies involved in the sale.
People often employ an accountant for financial work and, a mortgage solicitor in London or elsewhere to deal with the legal side. It may seem like an unnecessary cost to begin with but it can save money in the long run by ensuring the client gets the right type of advice and mortgage. It also helps to ensure that no avoidable mistakes are made.