Does your income fluctuate from month to month? Have you been employed for several years as a freelancer? It can seem challenging to demonstrate your finances if you don’t have a set monthly income. This article will share advice on how to get a mortgage without a fixed income.
Work With A Specialized Mortgage Provider
If you are self-employed or work overtime, working with a specialized mortgage provider or broker who understands your employment’s nuances can be essential. For example, if you work for the UK’s National Health Service (NHS), you might work unsocial hours, overtime and bank shifts in addition to a fixed income. Working with providers that offer mortgages for nurses and doctors can help ensure that you can demonstrate a regular income each month.
Calculate Your Income
Most mortgage providers will want proof of earnings for the past three years if you don’t have a monthly fixed income. Sit down and calculate your earnings for the past three years to get an accurate understanding of how much you can borrow. A mortgage provider might take the lowest of those three years or the yearly average to assess your borrowing potential.
Prepare Your Paperwork
Before getting a mortgage, you must prepare paperwork like payslips, bank statements and proof of deposit. This is perhaps even more important if you don’t have a fixed income. If your contract entitles you to receive paid overtime, you should bring this, along with your payslips, tax returns and any other documentation that proves your income over the past three years.
Get An Accountant
Some mortgage providers may only accept you for a mortgage if a qualified accountant signs off your documents. Get an accountant to review the paperwork you have gathered and confirm if everything is in order. This will also be useful if you’re finding it challenging to provide proof of your yearly income, as an accountant can share their insights into what a mortgage provider might be looking for.
Apply During Longer Term Projects
It can be challenging to demonstrate your income in between projects. Apply for a mortgage when starting a longer-term project or when you’ve got several projects lined up. This can help provide evidence of long-standing client relationships and show that you can pay your mortgage monthly.
Get Some Savings Lined Up
If you don’t have a fixed income, it can help to have a more significant deposit upfront. Get your savings to demonstrate you can put more money aside each month. Demonstrating savings equal to over 10% of the home’s value can considerably increase your chance of getting a mortgage.
With support from a specialist mortgage provider and adequate paperwork from the last three years, you can get a mortgage without a fixed income. Working with a qualified accountant and establishing longer-term working relationships can go a long way to supporting a mortgage application. Also, be prepared to demonstrate savings equal to over 10% of your mortgage application’s value to show that you can put aside monthly savings.