First time Home Buyer Self Employed Mortgage

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What is a First time Home Buyer?

If you have never owned a property before you can usually get a First time home buyer self employed mortgage. However with some lenders if you haven’t owned a property recently, they may class you as a First time home buyer. Getting on the property ladder for the first time is really exciting, probably a bit stressful too. Before you begin looking at properties and making offers you should speak to your Bank or a mortgage advisor to discuss your options.

How many years do I need to be self employed to get a First time home buyer self employed mortgage?

Most lenders want to see between two and three years of accounts for a mortgage. And they will usually average the two years. However some lenders will take just one year of accounts, this is rare though.Therefore it’s best to speak to your Bank or a mortgage advisor if you are recently self employed. Also if your income in the latest year was lower than  previous years lenders might use that rather than an average.

How much stamp duty will I pay?

First time buyers have a relatively simple structure for Stamp Duty, if your purchase price is under £500,000 you should pay:

  • Nothing on the first £300,000
  • 5% of the rest up to £500,000

*Currently due to government measures on Covid-19 you should pay nothing up to £500,000

How much can I borrow?

This should be one of your first considerations before you start looking at properties. It’s a bit harder for you as you are looking for a first time home buyer self employed mortgage. We often get asked for a mortgage calculator, but as they are really inaccurate we don’t have one. If you want to know how much you can borrow give us a call and we’ll tell you for free. It only takes around 10 minutes.

Most lenders will take an average of the last 2 years salary and dividends, or the latest year if its lower, and treat this as your income for affordability. However some lenders will use your net profit rather than your dividends, and some will take your latest year, rather than an average. It’s best to speak to a specialist mortgage broker who can give you exact figures.

I have debts, does this mean I can’t get a mortgage?

Not at all, we work with lenders that will accept debt, even if it’s adverse credit like defaults or CCJ’s, they are certainly out there, and may even be on the high street!

When you have debts it’s important to check your credit file, for this we recommend Checkmyfile, you can do this here. Checkmyfile is great as it will show your report from the biggest three credit referencing agencies.

Can I get a mortgage if I’ve just gone self employed?

This depends on how long ago you went self employed, and the lender. You can read an article on getting a mortgage when you are newly self employed here. If you have recently gone self employed it may be best to speak to your Bank or a mortgage advisor to discuss your options.

How do they work out a first time buyer self employed mortgage?

Generally they work out how much you can borrow the same as an employed person, you just have to provide more evidence. So an employed person provides up to 3 months evidence usually. For a self employed mortgage you may have to provide up to 3 years evidence.

How to boost your mortgage chances

Before you apply for a self employed mortgage it’s a good idea to get yourself in the best position possible.

  • Get in touch with a specialist mortgage broker, they can find the right lender to suit your situation.
  • Have a chartered accountant prepare your accounts – Lender’s like this a lot.
  • Check your credit rating, there’s lots of free services out there.
  • Save, save, save! Save as much deposit as you can.

What schemes are available for a first time home buyer mortgage?

Currently you have the options of Help to buy, Shared Ownership as well as Right to Buy. The first two options are available on certain New Build properties and you can view these at The last option, Right to buy is for Council Tenants wanting to purchase their property at a discounted price.

Shared ownership

  • Purchase a percentage of a property, and rent the rest! You can then usually buy more of the property later on when you can afford it.
  • Purchase between 25-75% of the property, depending on how much you can afford
  • Only available on new build properties
  • This scheme allows people on low income or have a low deposit to get on the property ladder.

Help to Buy

  • This is an Equity loan from the government for 20% of the property price (15% in Scotland or 40% in London)
  • The main benefit is only needing a 5% deposit
  • Again, only on New build properties
  • Potentially get a better rate as you only need a 75% mortgage.

Right to Buy

  • Allows you to purchase your Council property from the local authority at a discounted price
  • Available on your local authority property
  • Only available to qualifying council tenants, contact your Local authority for more info.

First homes

  • This scheme will allow Key Workers and First time buyers to purchase a new build property for 70% of its value.
  • The discount is a minimum of 30% so may be more depending on developer and location.
  • When you sell the property, you will sell it at 70% of its value, so it will always have the same discount.
  • Not available for second homes or buy to let properties.
  • This scheme is not out yet, and details may change over time, we hope to know more by the end of the year.

Got a question we didn’t answer? Maybe we do on our main Self Employed page, if not, get in touch!