Getting a mortgage with non-standard income can be more complex, but many specialist lenders offer flexible options for self-employed applicants, contractors and people with multiple income streams.
If you run your own business, work as a contractor or have more than one income stream, there will be mortgage options available.
Running your own business? Unsure what you can borrow?
Unlike standard income mortgage applications, where affordability is often based on a multiplier of your annual salary, when you are running your own business, there are lenders with more flexible approaches to assessing affordability.
For example, some lenders include the share of net profits, not just the income you draw. If you are a contractor or a CIS worker, lenders will often accept day rates or payslips as proof of income.
If you have only been trading for a short period, this is not necessarily a barrier to getting a mortgage. Some lenders will accept one year’s trading history rather than the more typical 2-3 years of trading.
Another factor to consider before you start your mortgage application is that it is not always beneficial to pay yourself a higher salary to increase borrowing potential. In some cases, keeping profits within your business for tax efficiency can strengthen your affordability.
Shift worker, contractor or on commission?
Being paid commission, shift allowance and overtime payments can boost your mortgage affordability with certain lenders. While there are some lenders who only take basic salary into account, there are many more products on the market which are designed to help people with this type of income.
In some cases, any additional income from shift allowance, overtime or commission will count up to 100% in affordability calculations if you can provide evidence that these are consistent payments.
Over the last few years, the number of people with zero-hour contracts has increased, and many lenders have adjusted their affordability assessments to provide more flexibility for shift workers, agency staff, CIS workers and zero-hour contractors.
CIS contractors may be assessed in the same way as employed applicants, with more lenders starting to take this approach.
