Why expert advice matters when your income isn’t as simple as PAYE
If you’re self-employed, a contractor, or running your own business, applying for a mortgage can feel like an uphill battle. Lenders don’t always make it easy — and the criteria can vary widely from one provider to another.
At NOVUS Financial Solutions, we specialise in helping clients with non-standard income structures secure the right mortgage. Whether you’re a sole trader, limited company director, or on a day rate contract, we know how to present your case clearly and effectively to lenders who understand your situation.
This guide explains what to expect, what to prepare, and how a whole of market broker like NOVUS can make all the difference.
Why It’s Different When You’re Self-Employed
Unlike salaried employees, self-employed applicants often need to provide more documentation and satisfy more complex affordability checks. Lenders may ask for:
- Two to three years of full business accounts
- SA302 tax returns or HMRC year-end summaries
- Accountant’s reference
- Evidence of future contracts or income pipeline
- Business bank statements
But not all lenders interpret this information the same way. That’s why it’s essential to work with a broker who knows how each lender approaches self-employed cases.
Contractor Mortgages: Understanding Day Rate Calculations
If you work as a contractor, particularly in industries like IT, engineering, or construction, lenders may assess your income based on your day rate.
Each lender uses a slightly different formula, but the typical calculation is:
Day rate × 5 days × 46 or 48 weeks = annual income used for affordability
For example, if your day rate is £400, the lender may assess your gross income as:
£400 × 5 × 48 = £96,000
But not all lenders offer this approach — and some may require a track record of previous contracts or a minimum time in your current role. At NOVUS, we know which lenders take a flexible view and how to match you with the right criteria.
Limited Company Directors: What Counts as Income?
If you run your own limited company, your income may come from a mix of salary, dividends, and retained profits. Some lenders will only consider the salary and dividends you’ve drawn, while others will also include retained profits, allowing for a higher borrowing potential.
Understanding which lenders are willing to take this broader view is key to maximising your options.
At NOVUS, we often liaise directly with underwriters to explain a company’s structure and financial health — going beyond the numbers to build a case that makes sense.
Preparing for a Mortgage Application: What to Have Ready
To give yourself the best chance of approval, here are a few key steps:
1. Get Your Accounts in Order
Work with a qualified accountant and ensure your last two years of accounts are accurate and up to date. Avoid late filings or inconsistencies that could raise questions.
2. Pay Down Debts if Possible
If you can reduce outstanding personal or business borrowing, it may help with affordability calculations.
3. Explain Any Dips or Irregularities
If one year’s income was lower due to COVID, a business reinvestment, or a maternity break, prepare a clear explanation. NOVUS can help present this to lenders in a way they understand.
4. Avoid Mixing Personal and Business Accounts
Keep your finances well separated, and ensure the business pays you in a consistent way. This gives a clearer picture to underwriters.
How NOVUS Builds a Strong Mortgage Case for You
We understand that every self-employed client is different. At NOVUS, we don’t just collect paperwork and submit it. We take the time to:
- Understand how your business works and what your real income picture looks like
- Select the lenders whose criteria best match your structure
- Speak to underwriters directly to explain complex elements
- Build a supporting case, including accountant letters or business projections where appropriate
- Monitor market changes and reapply if a better rate becomes available
This personalised, proactive approach has helped us secure mortgages for clients turned away elsewhere — especially those who don’t fit the high street mould.
A Real Example: Flexibility Matters
One client was a freelance consultant with two years of fluctuating income. A panel broker told them they didn’t earn enough to proceed. But we saw potential.
We found a lender willing to average the higher of the two years and accept an accountant’s projection for the current year. We also provided a letter of explanation and supporting documents. The result? A full mortgage offer within three weeks, and the keys to their new home two months later.
Final Thought: Complex Doesn’t Mean Impossible
Being self-employed shouldn’t stop you from accessing competitive mortgage rates. But it does mean you need a broker who understands how to navigate the details.
At NOVUS, we thrive on complexity. The more involved your case, the more value we can add.
Self-employed and need mortgage advice? Let’s start the conversation.
Contact NOVUS today or visit novusfinance.co.uk for tailored advice that works around you.
