The world of mortgages is rife with myths, and for self-employed individuals, these misconceptions can be particularly disheartening. Many business owners operate under false pretences about their eligibility, often leading them to believe homeownership is out of reach. Today, I want to bust some of these common myths.
Myth 1: You need 3+ years of accounts to get a mortgage.
Reality: While many mainstream lenders prefer this, it's not universally true. I regularly help self-employed clients with just 12-24 months of trading history. Specialist lenders are increasingly open to assessing applications based on strong business performance, a solid business plan, and demonstrable income stability, even with fewer years of accounts.
Myth 2: If you've had adverse credit, you'll never get a mortgage.
Reality: Absolutely not. Life happens, and financial blips can occur. My specialisation lies in working with clients who have adverse credit. Lenders in this niche market understand that circumstances can change. They look for evidence of financial recovery, stable income, and a commitment to responsible financial management since the adverse event. Your past doesn't have to dictate your future.
Myth 3: Taking a low salary and high dividends (or retained profits) is always best for a mortgage.
Reality: While tax-efficient, this isn't always mortgage-efficient. Lenders assess income differently. Some will use your salary plus dividends, others might consider your share of net profit, or even retained profits for limited company directors. It's crucial to understand how your specific income structure will be viewed by lenders, which is where specialist advice comes in.
Myth 4: You need a huge deposit if you're self-employed or have adverse credit.
Reality: While a larger deposit can certainly help, it's not always a prerequisite for self-employed or adverse credit mortgages. There are options available with lower deposits, depending on your overall financial picture and the specific lender's criteria. The key is to present a strong, well-prepared application.
My mission is to provide clarity and honest guidance, helping you navigate these complexities. Don't let myths deter you from your homeownership dreams. Let's discuss your unique situation and find a clear path forward. Book a Mortgage Clarity Call today.
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I’m Gary, a mortgage adviser based in Essex, specialising in self‑employed, complex income, and adverse‑credit cases.
