Getting a mortgage is one of the more stressful aspects of buying a house! There are so many hoops to jump through in order to prove you can afford to pay the loan back. Ever since the big credit crash in 2007, banks and building societies are much more careful about who they lend to, and how much they are prepared to lend. This becomes an even bigger issue when the applicant is self employed.
The issue which arises is the fact that lenders view self employment as a less secure business compared to people who are simply employed by another entity. Both parties could be earning the same amount of money into their bank account each month, but the employee has a much easier ride to get that mortgage finalised. This does seem a little unfair on the self employed person’s side, as they appear to be earning the same wages!
One of the things which is different for self employed is that banks expect to see at least two years’ worth of accounts, whereas the employed person generally only needs to supply payslips for a few months prior to the application.