Posted 29 Jun 2019
Full time sole trader/self-employed electricians
If you are a full-time sole trader electrician, like many others who are self-employed, you will need to provide at least three years’ worth of accounts when applying for a mortgage. This is because you will need to provide a lender with assurance that you can meet the monthly repayments of your mortgage through evidence such as accounts, tax returns, bank statements and payslips that show your business is thriving. If you don’t want to handle the paperwork, hire an accountant to do this for you. You’ll also need to give a lender a self assessment tax year overview and your SA302 papers.
If a lender believes that you can afford to pay back the mortgage, you’ll need to put down a deposit on the property you intend to purchase. This will need to be at least 10%, and the more you can put down as a deposit, the better the deal you will secure. Depending on a number of factors such as your credit score and accounts, a lender can offer you between three and fives times’ your income.
Full-time, freelance and contracted electricians
If you are an electrician working full-time as an employee of another company and pay tax through PAYE, but also do contracted work to make extra money on a freelance basis, this will not affect your chances of getting a mortgage. If you do freelance work on weekends, a lender may actually add these earnings on to the amount you currently earn with your employer through PAYE, and use this to estimate your annual income. Others may just simply assess your mortgage application based on the work you do with your permanent full-time employer. Bear in mind that you might find it hard to secure a mortgage deal if you are heavily reliant on your self-employed extra earnings because your full-time job on PAYE doesn’t earn much. In the eyes of a lender, this could be seen as a greater risk, because it could be difficult for you to meet repayments.
It is possible to influence a lender if you can prove that you have saved up your additional freelance earnings to build up a cash deposit to put down on a property. If you have a larger deposit, you stand a better chance of securing a good mortgage deal with a lower rate of interest.
If you are an electrician and would like more information and advice on the right kind of mortgage deal for your circumstances, get in touch with our experts at iam mortgages today where we can search the market for you to find a lender that meets your needs.