Tips For Buying a House as a Freelancer In London

Buying a House as a Freelancer In London

There are many misconceptions that it’s hard to buy a house if you’re a freelancer or self-employed. Freelance mortgages are the same as normal mortgages, they just take a little bit of work to prove to the mortgage lender that you have a regular income.

With high London property prices, you may think buying a house as a freelancer in London is impossible. This article will feature 8 tips for buying a house as a freelancer in London, from how to prepare for a mortgage to additional costs to consider. 


1.Gather Important Documents

When applying for a mortgage as a freelancer, there are a few things to consider. You will need to have proof of your income for up to the last 3 years in tax returns and accounts. You should make sure you have all the necessary documents together before you start applying for your mortgage to avoid delaying the process. 

2.Save for a Higher Deposit

More traditional mortgage lenders can demand a higher house deposit if you’re self-employed. Try and save as much as you can for a deposit but don’t push yourself too hard. Typically, some mortgage lenders might ask for a deposit between 15% and 20%, but a few mortgage lenders might accept London Help to Buy. Make queries about how much you should expect to save and work out a budget. 

3.Build up your Credit Score 

You should make sure your credit score is in good shape before applying for a mortgage. If you have any debt you can afford to pay off before applying for your mortgage, this can help to boost your credit score. A low-debt-to-income ratio such as paying off a student debt will be preferred by mortgage lenders than if you’re paying a credit card debt.

4.Register to Vote

You should register to vote so your name is on the electoral register. Many mortgage lenders will include this in their background checks, which will improve your chances of being accepted for a mortgage. 

5.Create a Business Bank Account

Make sure you have separate bank accounts for your work and personal accounts to keep things separate. If you took out a loan for personal reasons and not related to your business, then this could affect your credit score. With separate accounts, it’ll make the process of applying for a mortgage a lot easier with everything in one place.

6.Factor in Additional Costs

Don’t forget to factor in additional costs that come with buying a house such as conveyancing, surveying and removal fees. Many London house movers will want to make their move as cheap as they can. To keep costs down, you should compare a few removal companies online. By doing this, you’ll not only find a reputable company you can trust, but you’ll get the best price so you can stick to a budget. 

7.Be Prepared 

If you have only been self-employed for a year or less, it will be difficult to prove you have a reliable income when applying for a mortgage. You might have to hold off for at least 2 years so you have sufficient enough documents to prove your freelance income which you should keep in mind when it comes to your time-scale for buying a house. 

8. Talk to a Mortgage Adviser 

Whilst getting a mortgage as a freelancer is the same as a traditional mortgage, you will have to work a bit harder in proving your income is reliable. You should speak to a mortgage adviser before you apply so they can help you get everything you need in one place.

Getting a mortgage as a freelancer in London is possible. You will have to gather necessary documents to show your income over the last 2-3 years, but this will vary depending on the mortgage lender you choose and your circumstances. 

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