Can I get a mortgage if I freelance?

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Can I get a mortgage if I freelance?

Can I get a mortgage if I freelance? (Part 1)

Michael Tilston talks to us about the mortgage process for freelancers. Episode one of two, recorded in December 2024.

What is a self-employed freelancer?

We generally find these are people who have worked in a particular role for an amount of time and they move on from being employed to work for themselves. We find it a lot with journalism and editorial work.

A lot of the time, funnily enough, it tends to be with the same previous employer, but it means they are in more control of their own time and how they do those jobs. It can cover a wide range of roles and professions.

Can you get a mortgage as a freelancer? How hard is it to do this?

Most of the time you’ll be treated as if you’re self-employed. It’s quite straightforward. You’d need a year to two years’ books or accounts, which is the normal way banks assess your income to work out what you could borrow.

Another way sometimes applies, depending on the kind of freelance work you do and what the day rate is – as some lenders have a day rate contractor policy. It’s no harder to get a mortgage if you’re a freelancer than if you’re self-employed. It is all going to be down to the advice you get, understanding your income and how it’s made up.

What types of mortgages can I get if I’m a freelancer?

There’s no real difference. There aren’t different mortgages for employed and self-employed people. It would very much be down to what kind of income we can prove, how you’re paid and who you do your freelance work for.

How do I know if I’m classed as a freelancer? How long do you have to be a freelancer before getting a mortgage?

It’s going to be down to how you’re paid. As an example, perhaps you’ve got lots of jobs as a freelancer and you’re working for multiple different people with small contracts here and there. In that case you’re going to be treated as self-employed, and we would need a year to two year’s books as usual.

If you were a freelancer with a contract with just one company, where you’re earning £500 a day, for example, you would be classed as a day rate contractor. That would open up a whole different approach with some mortgage providers, where you could almost be treated as employed.

That’s why it’s difficult to say without speaking to the person and getting to know their circumstances. And that’s where a good advisor, of course, is worth their weight in gold, because they’ll know how best to approach it.

How much can I borrow? How much deposit do I need for a mortgage as a freelancer?

It’s down to how much you earn and how we prove your income. It is slightly different because we need to assess what we can use and therefore how much you could borrow. It’s not quite as simple as you earning £50,000 a year, therefore you can borrow £225,000. It varies with every lender.

The deposit doesn’t necessarily have to be any larger. You’re not going to be penalised. It will be standard as long as your credit score is good, but that would be the same whether you were employed, self-employed, a freelancer or contractor.

How do lenders assess mortgages for freelancers? What documents do I need to have ready?

Whenever you’re thinking of buying a property or getting a mortgage, always speak to your advisor in advance. Don’t do it after you’ve found a property that you’ve fallen in love with, because of course that could be too late – especially if we haven’t got everything in order to prove your income.

With a freelancer, most of the time you’ll be treated as self-employed – so you’ll need your two years’ books. But some freelancers might technically be classed as employed.
So you have to speak to an advisor.

We have to really get into the weeds as to what your pay is, how it’s structured and where it’s from, before we can tell you whether you need two years’ self-employment documents, three months’ pay slips, or your contract. It’s very open to interpretation until we get more information.

Can I get a mortgage if I’m employed with a part-time freelance income?

Yes, definitely. And if we can prove both, you can borrow more. With the employed role, we’d need the standard three months’ pay slips or a P60, depending on how your pay is made up from your employment.

Proof of part-time freelance work might be in the form of a contract that states how much you’re earning, or your tax returns. If that’s sustainable – which is key – it should be no problem at all.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP WITH YOUR MORTGAGE REPAYMENTS.

THERE MAY BE A FEE FOR MORTGAGE ADVICE. THE ACTUAL AMOUNT YOU PAY WILL DEPEND ON YOUR CIRCUMSTANCES. THE FEE IS UP TO 1% BUT A TYPICAL FEE IS 0.3% OF THE AMOUNT BORROWED.

Speak To an Expert

Come on in and be quite forward with what you’re after – just be very honest with your mortgage broker. It’s good to make sure that we know absolutely everything about you. That way we can’t be blindsided by a lender. An open book policy is very good when coming to see your mortgage broker. 

Can I get a mortgage if I freelance?

Can I get a mortgage if I freelance? (Part 2)

We continue the conversation on how the mortgage process works for freelancers with Michael Tilston. Episode two of two, recorded in December 2024.

Are mortgages for freelancers more expensive?

No, they’re not more expensive. There are no penalties, generally speaking, and most lenders treat freelancers the same as standard self-employed.

What do I need to do to apply for a mortgage as a freelancer?

The key here is speaking to your advisor and getting a plan in place in advance. You never want to be in a position where you’ve fallen in love with a property, but you’re not ready because you don’t know what paperwork you’re going to need.

Speak to an experienced advisor first, make sure your documents are in order and your Decision in Principle is done. Then you can at least see that you’ve passed the credit scoring requirements for a lender and you’ve got enough income for a mortgage.

That’s the first thing you’re going to need before going out hunting for properties, knowing you’re as ready as possible at that stage.

Can I get a Buy to Let mortgage as a freelancer? Any differences here?

Yes, no problem at all. It’s just going to be proving your income – because while some lenders in the Buy to Let space don’t require any income, they’ll generally ask what you are earning.

You’d normally need some form of proof to show that income, even if it’s not necessary for that particular lender. But you definitely can get a Buy to Let mortgage as a freelancer without any trouble.

Can I get a mortgage as a freelancer if I have bad credit?

You can. It’s similar for anyone who’s self-employed and everyone else. Anyone who’s got bad credit would have to jump through the same hoops. You’re not singled out or penalised for being a freelancer. There’s a plethora of lenders who can help someone who’s got bad credit.

Can I get a joint mortgage as a freelancer?

There are no differences here. Obviously, both people will be assessed on their income and looked at on their own merits. But there’s absolutely no problem at all having a joint mortgage as a freelancer.

How can I boost my chances of getting a mortgage as a freelancer?

Being prepared and having all the documents available to show your earnings always helps. Obviously, the more you earn, the more you can borrow.

Make sure your paperwork is all in order. If you want to really maximise your borrowing, make sure you’re working like the clappers and doing as much as you can.

Should I go freelance or wait for my mortgage to go through?

You might have applied for a mortgage at a point where you’re employed, and then you’re considering going freelance before the mortgage completes. You have to technically inform the lender if that’s to happen.

If you change jobs or go self-employed after you’ve applied for a mortgage, that mortgage offer will almost certainly be pulled, unless it’s a very specialist type where all of that’s been taken into account – and even then, that’s only for specific roles. You should wait for the mortgage to go through.

If you’re going to go freelance, you shouldn’t really be applying for a mortgage because, of course, your income is not guaranteed. I appreciate that it never really is in this world. But with the best of intentions, if you’re going to make that leap, you shouldn’t really be applying for a mortgage at that point.

How do I apply for a mortgage as a freelancer? How can a mortgage broker help?

You need to come and speak to an expert as the first step. Every freelancer role is different depending on the sector, the occupation, what you’re doing and how much you’re being paid, which is why you really need to sit down and speak to a professional.

Not every advisor is as good with the self-employed or freelancers, so make sure you get the right expert on your side to help you. That’s going to be key to this.

It’s always good to speak to an advisor, because we’ll know instantly which way to go and how to assess your income. We can quickly give you an idea as to what you can borrow. Without that, it’s very difficult for you to know what you’re doing.

YOUR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP WITH YOUR MORTGAGE REPAYMENTS.

THE FINANCIAL CONDUCT AUTHORITY DOES NOT REGULATE MOST BUY TO LET MORTGAGES.

THERE MAY BE A FEE FOR MORTGAGE ADVICE. THE ACTUAL AMOUNT YOU PAY WILL DEPEND ON YOUR CIRCUMSTANCES. THE FEE IS UP TO 1% BUT A TYPICAL FEE IS 0.3% OF THE AMOUNT BORROWED.