Self Employed Mortgages
The realm of self-employed mortgages can be a little confusing. As with other sectors of the market, the various different products often get called various different things: self-employed mortgages, self-certification mortgages, non-status mortgages and so on. But to further confuse matters, there is substantial crossover between the different types, with some self-certification loans open to people in full time employment and others restricted only to those who are self-employed.

Normal Mortgages
It is possible for a self-employed worker to obtain a normal mortgage. Usually lenders assess the individual's ability to repay the loan by way of their PAYE slips or P60 forms. However self-employed individuals do not have these and are required to prove their salary based on their accounts. This usually requires 3 years worth of audited accounts. In principal if these can be shown then there will be no problem finding a lender.

Problems With Normal Mortgages
There are a couple of problems which can make finding a normal mortgage harder:

• > 3 years: getting 3 years of accounts can actually take much longer. Since accounts are prepared annually in arrears, this means that a minimum of 4 years solid trading history is usually required in order to get a mortgage, probably a lot more when you consider that most businesses don't make a profit in their first two or three years.
• Apparent income: many business owners pay themselves nominal salaries, but often take substantial dividend payments or a share of the profits, in order to minimise their tax burden. Furthermore, modern accounting practices are often aimed at reducing the apparent income of the individual concerned, which can often leave their income looking, on paper at least, to be pretty minimal. So while many applicants may actually be earning big money, they will still struggle to get a mainstream mortgage, even if they do have the necessary number of years' worth of accounts.

Self-certification Mortgage
For those self-employed borrowers who are unable to get a mainstream mortgage for one of these reasons, or because they have simply not been trading for long enough, the only realistic option is to go for a self-certification mortgage.