This month, we are taking a closer look at those working outside the routines of the typical working week. Self-employed, almost retired, or between jobs—how does this track for mortgages? Even with a regular income, this month, our newsletters will help you find more financial security. Providing a wealth of knowledge for all!
To get started, we’ll go through how to get a mortgage. We’ve asked our self-employed clients and peers for some bonus tips. To stay on top of your finances when you don’t have a regular income.
Keep reading to find out more. Don’t forget, using an advisor can help to take the hassle out of your mortgage needs. Contact us for personalised advice just for you and thank you using our team.
In this month’s newsletter:
How to get a mortgage if you are self employed.
Work habits in the UK continue to evolve and change. And so, the mortgage industry is addressing concerns from the self-employed. Guess what? Did you know you can get a mortgage if you are self-employed? You may just need to get some extra steps in place. But we are here to help and get you ready for homeownership!
Let’s dive in!
Yes, you can get a mortgage in the UK if you’re self-employed, unemployed, retired, or haven’t been in a job long. But the process may be more complex. Lenders focus on affordability, income stability, and creditworthiness. Here’s what to expect:
1. Self-Employed
Possible? Yes, but stricter requirements
What You Need:
2-3 years of accounts
SA302 tax returns + tax year overviews from HMRC
Bank statements to show your income stability
A good credit score & deposit (10-20% is usually needed)
Tip: Using an independent mortgage broker specialising in this to find more accommodating lenders.
2. Unemployed
Possible? Yes, but harder
What You Need:
Proof of alternative income (e.g., savings, rental income, pension, benefits)
A larger deposit (often 20%+)
A strong credit score
Tip: Some lenders may approve if you have a co-signer or guarantor.
3. Retired or Nearing Retirement
Possible? Yes, but age limits apply
What You Need:
Proof of pension income, savings, or investments
Some lenders have a maximum age limit (often 75-85 years old at mortgage end)
Equity Release (like lifetime mortgages) or retirement mortgages may be an option.
Tip: A Retirement Interest-Only (RIO) mortgage may offer lower repayments.
4. Haven’t Been in a Job Long
Possible? Yes, but depends on the lender
What You Need:
Some lenders require at least 3-6 months of employment
If you are switching jobs but in the same industry. It’s easier to get approval
A strong credit score and larger deposit may help
Tip: If on probation, some lenders may still approve. Especially if you have a contract showing stable employment.
General Tips for Approval
Improve Your Credit Score – Pay off debts, avoid overdrafts, and check your credit file.
Save a Bigger Deposit – A 10-20% deposit makes approval easier.
Use a Specialist Mortgage Broker – Some lenders specialise in self-employed, unemployed, or retired applicants.
Show Stable Income – Even if it’s from investments, pensions, or side businesses.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
Self-employed? How to stay on top of your finances
Managing money and bills self-employed can feel like a juggling act. Especially since you don’t have steady pay or the automatic deductions for things like taxes and national insurance.
However, with the right systems in place, you can stay on top of your finances and ensure everything is paid on time. Here are some tips we’ve loved that can help take the hassle out of bills and finances. (Feel free to print this and use it as a checklist!)
- Set Up a Separate Business Bank Account
We recommend separating your business finances from your personal ones. This makes it easier to track income and expenses. Make sure you track all your income to know how much tax to pay at the end of the year.
- Use Accounting Software or Spreadsheets
This can help track income, expenses, and VAT (if you’re VAT-registered). Many of these tools also let you automate invoicing and reminders. If you’re more comfortable with spreadsheets, create a system to log income and expenses.
- Set Money Aside for Tax
Unlike a regular job, income tax and National Insurance contributions (NICs) are not automatically deducted from your earnings. You could open a separate tax savings account for a percentage of your earnings. Ensuring you have the money available when it’s time to pay your taxes.
- Track Business Expenses
You can claim business-related expenses to reduce your taxable income. So keep all your receipts and invoices in case you need to prove them to HMRC. Accounting software can help categorise and track expenses automatically. Or you can log them in a spreadsheet.
- Invoice Promptly & Keep Track of Payments
You can use templates or invoicing software to create clear, professional invoices. Include your business details, a breakdown of the work, payment terms, and bank details. Don’t be afraid to chase overdue payments with gentle reminders. Or more formal follow-ups. Keeping cash flow healthy is crucial!
- Emergency Fund & Savings
Saving around 3-6 months living expenses can help cover unexpected costs. Or if you have short periods when income is lower than usual. Consider using a high-interest savings account to help your money grow. Income protection, critical illness cover, and private health insurance can provide an extra safety net.
- Consider Pension & Retirement Planning
If you don’t have access to a workplace pension, you’ll need to set up a private pension. The Self-Invested Personal Pension (SIPP) is a good option for many self-employed individuals. Allowing you to contribute directly to your pension fund. Chat to your accountant about tax relief on your pension contributions. A great incentive to save for the future.
If you’re ever unsure about anything tax-related, it’s always worth speaking to an accountant or financial advisor. Is there a specific area you’re finding tricky to manage? Like invoicing or taxes, or are you just starting to build these habits? We’d love to chat and see where we could help.