Halifax Self-Employed Mortgage Guide
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Lenders always want to see a more lengthy track record of a client being self-employed compared to an employed client. Many lenders would want to see atleast 2 years of track record of trading.
This makes things a lot more difficult for some one who has started a new business. However, a very limited number of lenders like Halifax can consider a 1 years account for self employed mortgage.
Our guide will cover all you need to know about Halifax’s 1 year self employed mortgage and their criteria which can help you to achieve the mortgage you need while being self employed.
What Is A Self-Employed Mortgage And What Are The Challenges To Get One?
If Someone is running their own business this is known as being self employed. Arranging a mortgage for a self-employed person can be complicated as many banks wants to see a track record of the business. This involves using Tax returns from latest 2 years and using average income.
One of the major challenges of getting a self-employed mortgage is businesses try to run as tax efficient as possible. This may be in the form of taking less income from the business, but this affects the borrowing capacity for your mortgage.
What Are Halifax’s 1-Year Self-Employed Mortgage Requirements?
Halifax has its own set of criteria for being eligible for a self employed mortgage. Some of them are listed below.
Good credit history:
One of the starting points to get a mortgage as a self employed person is to have a good credit history. Halifax wants to see a strong credit history while considering a 1 year self employed mortgage.
One year trading:
Halifax will need 12 months trading history for a self-employed person before they can consider them for a mortgage.
Same line of work:
While applying for a self employed mortgage with a 1 year account Halifax would like to see a history of if the person has started new work or if they are experienced. Having the same line of work could help in Halifax’s mortgage approval.
Projected income:
When applying for mortgage on a 1 year account lenders providing projections for the next years can improve your chances of mortgage approval. Projections can be seen as how the business will perform in the following years. This helps a lender make lending decisions.
If the latest years of your income is lower than the previous year then lenders will see that as a decline in income and use the lower end of figures.
What Documents Does Halifax Need For A 1 Year Self-Employed Mortgage ?
The documents that Halifax requires for self-employed mortgages are the same as any other mortgage. The documents listed below are required when applying to Halifax.
Proof of ID:
ID proof like your passport or full driving license is required.
Address proof:
Address proof like a recent utility bill or council tax is required.
Bank Accounts:
3 months of bank account history for your personal account and business account will be asked form Halifax.
Latest SA302:
When applying for a mortgage on a 1 year account Halifax will need an SA302 and Tax overview along with the company account and accountant’s letter for projection.
Previous job history:
Previous job history is required to prove a track record of working in the same line of work.
Deposit:
Bank statements showing the deposit source.
How Much Can I Borrow in Halifax’s 1 Year Account Mortgages?
Normally Halifax will lend up to 4.5 times your income. But this limit can go up to 5.5 times. The amount you can borrow will be dependent on good credit history, income and deposit amount.
For example, someone with a high income above £75,000 with a 25 % deposit can borrow up to 5.5 time of their income. But the same income with a reduced deposit of 10% would mean the lending would drop to 4.75%. And with a 5 % deposit Halifax will lend only 4.5 times the income.
What is the Process Of Halifax’s Self-Employed Mortgage?
If you are thinking of getting a mortgage, the following steps are part of the process.
Talk to a mortgage broker:
Having a mortgage broker on your case can help with getting a successful mortgage application. A Broker will guide you through the entire process of obtaining a mortgage.
Gather documents:
Collect all necessary documents like income proof, deposit proof, bank statements and ID to get ready for your mortgage application.
Get your DIP:
Your mortgage broker will review your documents and discuss possible mortgage options. They can get you a decision in principle, outlining your budget to show that you are mortgage ready.
Find your home:
Once you know your budget then you can start hunting for the right property you would like to purchase.
Apply for a mortgage:
Once your property is finalized your broker can submit your mortgage application to Halifax. You can select Halifax fixed rate mortgage or tracker rate.
Mortgage underwriting and approval:
Halifax will do all the underwriting of the mortgage application and approve your mortgage by sending your formal mortgage offer.
Advantages Of Halifax’s 1 Year Self-Employed Mortgage .
Following benefits of using Halifax as a mortgage lenders.
Better rates:
Halifax offers arguably the most competitive rates compared to other lenders who offer mortgages to 1 year self-employed clients.
Fast underwriting:
Halifax is a major high street lender known for its fast underwriting and smooth process.
Variety of products:
Halifax offers a wide range of mortgage products to choose from suitable to client’s needs.
Good customer support:
Halifax is known for excellent customer support.
All of the points above makes Halifax a major high-street lender.
How To Increase Your Chances Of Getting A Halifax 1 Year Self-Employed Mortgage.
To increase the chances of getting your mortgage approval, you should keep in mind the following important factors.
Credit score :
Having a good credit score can help and improve your mortgage approval chances with Halifax.
Higher deposit:
Having a good amount of deposit can help you secure the maximum possible loan amount along with good rates. Whenever it is possible to increase the deposit you should as it will help towards your mortgage application.
Supporting documentation:
Having a supporting documentation like an accountant’s projection and previous job history will help for your mortgage approval.
Work with a Mortgage Broker:
Working with a mortgage broker can certainly help to secure your mortgage offer quicker.
Can A Mortgage Broker Help Me With My Application?
Yes, a Mortgage Broker like Marianna FS can provide personalised mortgage guidance for a self employed client. For example, we can help you to prepare all the documents needed for a mortgage application.
Our mortgage brokers can talk to your accountant about documents needed in advance to minimize the delay to your mortgage application.
We can prepare you on improving your credit score, advising the amount of deposit needed or advise you on how to conduct your accounts.
Whatever your mortgage needs are, working with MariannaFS can help you secure the mortgage in no time.
Contact us for more information with your Halifax Mortgage Application by calling 02080902043 or by email on info@mariannafs.co.uk.
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