Getting a Mortgage if You Are Self-Employed

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More people are working for themselves than ever before. With around 15 million people in the USA owning their own business, working as a freelancer or being self-employed in another way. But, it’s also harder to get a mortgage than ever before, especially for first-time buyers. Unfortunately for the millions of self-employed workers out there, they can have it harder than others. Banks are reluctant to lend anyway, and when you work for yourself, there’s no guaranteed income. Even if you are currently earning well, without a business behind you, banks must put a lot of trust in you to assume you’ll earn enough to make mortgage repayments for the next 20 years or so.

But, before you panic and assume that you’ll never be able to buy your own home. Don’t worry. It’s perfectly possible to get a mortgage if you work for yourself. It might just take a little more preparation. Here’s what you need to do.

Sort your Credit

Do credit repair services really work? Well, yes, they can if you need them. Self-employed or not, you’re never going to get approved for a mortgage if you’ve got a bad credit score. The first thing that you need to do is check yours so that you know what you are working with. Then, take a detailed look, and query anything that you think might be wrong, or anything that you want to be removed from your file. Then get help to make further improvements.


You also need to be earning well, and consistently. How much will depend on your situation, if you are applying alone or with a partner, and how much you need to borrow. But, whatever the amount, you need to prove that you can afford the mortgage and that you will be able to for the life of the loan.

Record Your Income

If you are self-employed, you’ll need to record your income anyway for tax purposes. But, you’ll need details if you hope to get a mortgage. Once you start earning the amount you need to pay your mortgage (remembering to take other expenditure into account), you’ll need to keep doing it, and have proof in the form of invoices, spreadsheets and tax returns for at least two years.

Spend Less

When working out if you can afford to pay your loan back, lenders won’t just look at your income. They’ll also look at your expenditure. For an employee, they’ll ask to see three months bank statements and pay slips. For someone that is self-employed, you’ll need two years of income and up to a year of bank statements. So, start spending as little as possible. It can be a good idea to buy things on a credit card, especially any non-essentials, and pay it off in full every month. That way there’s only one payment leaving your account.


Most employees with a good income can get a mortgage with a 10% deposit. If you are self-employed, you’ll want a bigger deposit. Start saving now, and aim to go in with at least 20%. This shows that you can save, live on less and are sensible with money. It also means you’ll be asking to borrow less.

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