Episode 3 | Self-employed mortgages

Self-employed mortgages and the changing world of work

How is mortgage lending evolving for self-employed borrowers?

In the third episode of our Powered by Partnership podcast, Francesco Di Pietro is joined by George Yerou, Head of Mortgage Sales at Freelancer Financials, and Matt Coulson, Founder and Managing Director at Heron Financial, to explore self-employed mortgage lending and the changing world of work.

Together, they discuss the realities of self-employed mortgages, from assessing different income types and placing more complex cases to the role of technology, underwriting expertise and strong broker-lender relationships in supporting better outcomes for clients.

Understanding self-employed borrowers

Self-employment can take many different forms. From limited company directors and business owners to contractors and people with multiple income streams, clients may have financial circumstances that don't fit a traditional employed profile.

The episode explores why understanding the individual behind the numbers is important when assessing a self-employed mortgage application.

For brokers, understanding how a client's business operates, how income is generated and what has influenced recent performance can help build a stronger picture of the client when speaking to lenders.

Flexible self-employed mortgage lending

Self-employed borrowers are not always more complex than employed applicants, but their income can require a different approach to assessment.

At Newcastle for Intermediaries, we recognise that a client doesn't have to have a long trading history to have a viable mortgage application. We offer specific products for self-employed clients with less than two years' trading, helping brokers consider mortgage options for clients earlier in their self-employed journey.

Our approach combines clear criteria with common-sense underwriting, giving brokers access to experienced people when they need support with individual cases. This reflects our wider commitment to providing personalised guidance and a common-sense approach to underwriting.

For brokers, understanding the different ways lenders assess self-employed income can help identify potential options for clients whose circumstances don't follow a traditional employment pattern.

Looking beyond the numbers

One of the key themes of the episode is the importance of understanding the circumstances behind a client's financial information.

Self-employed income can change for many reasons. A business may be growing, income may fluctuate from year to year, or a client's accounts may not immediately tell the full story.

The guests discuss why looking at the wider context can be valuable when assessing a self-employed mortgage application.

For brokers, knowing the client's business and being able to explain their circumstances can help create a more informed conversation with a lender.

This is where expert underwriting and strong broker relationships work together, combining the insight a broker has about their client with the lender's understanding of its lending criteria.

Supporting self-employed clients

The episode explores how technology, data and automation could help make processes more efficient and support the assessment of different types of self-employed income.

However, technology is only part of the picture.

The conversation highlights the importance of experienced underwriting and human judgement when considering more individual or complex circumstances. 

The episode also looks at how brokers can help clients who may be unfamiliar with the mortgage process for self-employed applicants.

Brokers can help clients:

• Understand how their income may be assessed
• Prepare the relevant information for their application
• Identify lenders with appropriate self-employed criteria
• Explain their business and financial circumstances
• Explore potential mortgage options
• Understand what they may need to do to prepare for a future application

The guests also discuss the importance of building knowledge of different lender propositions and using resources such as BDMs and lending criteria to support individual cases.

Growing your self-employed client base

The episode also explores how brokers can build a reputation in the self-employed market and create opportunities for future growth.

For George and Matt, strong relationships are an important part of that. Building connections with clients, accountants, solicitors, estate agents and house builders can create valuable referral opportunities, while developing a clear understanding of self-employed borrowers can help brokers build confidence and establish themselves within this area of the market.

As your knowledge of self-employed lending grows, so can your reputation. By understanding different lender propositions, developing strong relationships and building confidence in placing more complex cases, brokers can establish themselves as a trusted source of advice for self-employed clients.

Over time, these relationships can help create a steady pipeline of referrals, supporting both business growth and better outcomes for clients.

Self-employed lending at Newcastle for Intermediaries

We know self-employed borrowers do not always fit a standard lending model. That's why our proposition is designed to give brokers more options and access to experienced support when they need it.

Key features include:

• Products for clients with less than two years' trading, up to 80% LTV
• Salary, net dividends, or share of net profit before corporation tax considered for limited company directors
• Contractor day rate calculated at 5 × 46 weeks, with just 1 month’s remaining contract required
• Common-sense underwriting
• Access to dedicated BDM support

Our current proposition includes dedicated products for self-employed clients with less than two years' trading, while standard policy applies up to 95% LTV for clients trading for over two years.

Key takeaways

Self-employed doesn't always mean complex

Different business structures, income sources and trading histories mean understanding the individual circumstances behind an application is important.

Understanding the client matters

Looking beyond the figures can help brokers build stronger cases and have more informed conversations with lenders.

Relationships create opportunities

Strong relationships with clients, accountants, solicitors, estate agents and house builders can help brokers grow their self-employed business.

Technology should support people

Technology can improve efficiency, but experienced brokers and underwriters remain essential when assessing more individual circumstances.

Partnership helps deliver better outcomes

Understanding lender criteria, using BDM support and speaking to lenders about individual cases can help brokers navigate self-employed lending with greater confidence.