*My personal preference is that you have at least a 10% deposit*
Our ethos of preparation is key, understanding the deposit that you’re going to need, is going to enable you to understand where the finish line is and what goals you’re aiming for, in terms of saving your deposit and the income that you need to achieve for your mortgage.
Watch this video below or read the blog to see how much deposit you will need for your mortgage and how you can get yourself prepared:
How Much Deposit Will I Need For My Self-Employed Mortgage?
I want to talk to you about the deposit that you need to get your self-employed mortgage. Now, it could be possible for you to get a mortgage on a residential basis, i.e., you’re a first-time buyer or you’re moving into a new family home, with potentially a 5% deposit. So that’s 5% of the property value or the purchase price. Now, the issue of doing that is there’s this very small number of lenders that are going to be available to you, that are going to offer 5% deposits. And that means that you’re going to potentially pay more for your mortgage and interest rate, and you’re going to have higher fees applicable to the mortgage as well.
So my personal preference is that you have at least a 10% deposit. And that’s going to mean that you’re going to have more lenders available to you and the interest rate could be better, and you’re also going to find that the lender fees are going to be much, much less. And with more availability means that the criteria aren’t as strict, because I have more lenders to choose from for you.
Now, depending on the size of the property that you’re buying, or the value of the property that you’re buying, some of my clients are buying £1.2 million houses and looking for mortgages three-quarters of a million, and in those circumstances the mortgage lender often requests that you have a 15% to 20% deposit. And it all comes back to your personal data and the documentation that you have, how your business is set up, whether your self-employed, sole trader, limited company business owner, contractor. Every single lender has a different set of criteria that you have to meet. And getting a self-employed mortgage is much like making a puzzle. I’m sure you’ve made a puzzle with your children, if you have them, or when you were a child, and you’ve just literally got to piece all the bits together.
So my ethos of preparation is very, very key, and understanding the deposit that you’re going to need, is going to enable you to understand where the finish line is and what goals you’re aiming for, in terms of saving your deposit and the income that you need to achieve for your mortgage. Because although the deposit is a big key factor, if you are unable to afford a mortgage at 95% of the property’s value then you’re going to have to save that little bit more.
So I hope that helps you, in relation to getting your deposit saved. Ideally, 10%, if you’re going for a large mortgage, like lots of my clients do, then you could be looking at 15% to 20%. If you have any questions then do leave any comments on the video. Alternatively, if you want to take the logical next step you can go to our website, and download the Seven Mistakes that Business Owners and Entrepreneurs Make When Getting Their Mortgage, that puts you into an email sequence that’s going to teach you over the coming weeks how you can get prepared for self-employed mortgage success.
Here is what to do next:
If that’s something that you would like us to help you with, then please three options. If you want help immediately and you want to speak to somebody, then you can go to the active.mortgage website and you can submit an inquiry and you’ll get called by one of my team – https://active.mortgage/
Alternatively, you can visit the same website and you can download a copy of, the Seven Mistakes that Business Owners and Entrepreneurs Make When Getting Their Mortgage, and that will put you into an email sequence that will keep you updated on how you can prepare – https://active.mortgage/7-mistakes-download/
Or you can go to Amazon and buy a copy of my book, The Self-Employed Mortgage Guide, which talks all around my ethos of getting prepared and making sure that you get all your ducks in a row to remove the stress, save yourself money, and get your mortgage with ease. Thanks very much. I look forward to seeing you again – The Self-Employed Mortgage Guide