Buy-to-let property investment attracts people from all of life’s stages; from young entrepreneurs looking to unlock financial freedom to older investors looking to enjoy a more comfortable retirement or build an inheritance for their families.

That said, if you’ve just started up as a self-employed entrepreneur, you might be feeling a little daunted at the prospect of securing your first buy-to-let mortgage. 

How are you going to convince lenders you can afford the repayments without the accounts to back it up?

Don’t get discouraged; let’s find out why being self-employed isn’t such a problem for property investment…

Can you still get a buy-to-let mortgage with no proof of earnings?

The answer is yes, you can; it just means that the pool of mortgage lenders available to you will be generally smaller.

The issue isn’t just with startup entrepreneurs and their lack of accounting records. Lenders have tended to shy away from most self-employed buyers in general, since their finances are often more complex and difficult to untangle.

But keep in mind; when it comes to buy-to-let mortgages, the projected rental income from the property is far more important to lenders than your own current personal finances.

Plus, with the gig economy continuing to grow, it’s only natural that lenders have become more accustomed to self-employed borrowers. 

In fact, there are a handful of lenders who specialize in mortgages for self-employed persons; although you won’t necessarily have to rely on one of these for your own buy-to-let borrowing.

Are there any other hurdles to getting a buy-to-let mortgage as an entrepreneur?

While some mortgage options will come without a minimum personal income requirement, they may still come with a minimum projected rental income requirement.

In addition, the deposit requirements for self-employed persons may also be slightly higher than those for other types of investors. This can be a bigger issue for buy-to-let purchases, which often already come with high deposit requirements of their own.

But your mileage may vary on this. You might simply find that your lender offers generally affordable rates with a lower deposit and lower rental income projections, but that you’ll need a higher deposit and/or higher rental income figures to unlock their best deals.

What about residential mortgages? Can I get a personal mortgage with no proof of earnings?

When it comes to buying a home for yourself, securing a mortgage without proof of earnings can be more tricky; but it’s still absolutely possible.

The story is much the same as above; except with a personal residential mortgage, you won’t have any rental income projections to point to when your lender asks how you’re going to repay the loan.

But there are other records that may help you convince lenders of your mortgage suitability. You might instead turn to:

• Evidence of previous employment in the same industry as your new business
• Older income records from previous employment (i.e. bank statements)
• Your business plan and projected earnings for your new self-employed business
• Any contracts you already have with clients or partners

How to increase your chances of securing a mortgage

It’s important to note that some lenders will be more prepared to lend to limited companies than independent freelancers; so in some cases, setting up an SPV structure for your portfolio can boost your chances of getting approved.

Don’t be too discouraged if you find yourself having to rely on older records. Having any proof of income or evidence that you can afford the repayments is usually better than none. 

Whether you’re buying a buy-to-let or a new home, previous and/or current home ownership is also seen as a boon by lenders; assuming that you’ve kept up the repayments on that property’s mortgage repayments as well.

And finally, speak to a mortgage broker as soon as possible. The criteria for self-employed entrepreneurs can be even more complex than regular mortgage deals; so having an expert on board can help you navigate lenders’ requirements and track down the best deals for your needs.

SPV Mortgages can do just that; with more than a decade of expertise in finding and securing the perfect buy-to-let and residential mortgage deals for our clients. Let’s start your property investment journey on the right foot; get in touch to arrange a consultation today.