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For people who are self-employed, or who are working on a contract basis, or who have an irregular or variable income, it will usually be harder to find a mortgage than it is for someone who is a PAYE employee and so can prove their income easily.

A self-employed person is someone who runs their own business and works for themselves without an employer.

Although technically employed on a PAYE basis by their own company, directors of small limited companies, will generally be classed by mortgage lenders as self employed when it comes to applying for a mortgage or remortgage.

Anyone who is self-employed will usually find it harder to prove their income than someone who is a PAYE employee of someone else. This can be a problem for many mortgage lenders, as they like to have clear proof of your earnings before they will agree to let you have a mortgage.

The UK has over three million self-employed individuals. So this rigid attitude by many mortgage lenders is a problem that affects a large number of people. This is despite the fact that many company directors and self-employed people often earn more than many salaried employees.

It is easy for employed people to prove their income to a mortgage lender. Employed people can use their payslips and P60 as proof of salary. But for self-employed borrowers, there is no such straightforward equivalent.

Instead of payslips, self-employed mortgage applicants may be asked to provide audited business accounts showing what their income has been over the last three years. However, in many cases, these accounts will not give an accurate reflection of how much money a self-employed person is making. This is because if the accountant who prepared the accounts is doing his job properly, he will have helped the self-employed person or business owner to offset as many allowable expenses as possible against tax. This has the effect of reducing the self-employed person's net profit - and it is this net profit from the accounts which the mortgage lender will use when calculating the size of mortgage they are prepared to offer.

The situation is even worse for people who have only been self-employed for a short period of time, as they may not have been in business for long enough to have had three years' worth of accounts prepared.

Fortunately, there are a growing number of mortgage lenders who specialise in self-certification mortgages and self-employed mortgages. These mortgage lenders understand the different and varied working patterns of self-employed mortgage applicants, contract workers, and people whose jobs are seasonal or whose income comes from multiple sources.

Self employed mortgage lenders will assess each mortgage applicant's case individually rather than just applying a series of one-size-fits-all income tests. For many self-employed or self-certification mortgages this means that you do not need to supply any proof of income - you just declare what your income is without having to provide any supporting paperwork.

The mortgage lenders who provide self-employed and self-certification mortgages are also likely to be the ones who offer flexible mortgages that allow overpayments and underpayments. This is ideal for self-employed people and contractors whose income can fluctuate throughout the year. A flexible self-employed mortgage means you can overpay when business is good and you have spare cash and then underpay if there is a quiet period for your business.

If you think a self-employed mortgage or a self-certification mortgage may be right for you, please fill in our enquiry form and we will arrange for a mortgage advisor or broker who specialises in helping find mortgages for the self-employed to contact you.