Self-employed mortgage a challenge? Many people think that getting a mortgage as a (starting) self-employed person is impossible or a lot of hassle. That is incorrect and not correct. When you have good administration and your affairs in order, it is possible to qualify for a mortgage without ‘hassle’. In this article we list your opportunities and which documents you need for your mortgage application.
What exactly is a freelancer?
In this article, by self-employed person or freelancer, we mean the IB entrepreneur. An entrepreneur for income tax. As a self-employed person you can legally have a sole proprietorship, but also a general partnership (VOF), a private limited company (BV) or a partnership is possible. In principle, you can use the principles and rules of the game in this article for all these legal forms. It is important to know and take into account that every situation is different. Please contact us to discuss your personal situation.
Are you a director (major shareholder) within a BV or a NV (public limited company)? Then there is more to your mortgage application. In that case, make an appointment with one of our advisors for more information and tailor-made advice.
Opportunities for freelancers
Many entrepreneurs think that they can only get a mortgage after three financial years as a self-employed person. Three years of experience as a self-employed person makes it in most cases a lot easier to determine the business income due to the accumulated history, but even after only one or two financial years you can get a mortgage with a good substantiation from a number of lenders.
For example, there are lenders that will accept a forecast of earnings in addition to your first two fiscal years. Want to count more heavily in the last year, for example 3 times. Or lenders that charge with a percentage of your profit from your first or second financial year.
Another approach is to significantly increase your chances of financing your dream home (and significantly reduce your mortgage stress) by investing your own money and having clear annual accounts (preferably drawn up by a bookkeeper or accountant).
| How long have you been active as a freelancer? | How does the bank see you? | Can you get a self-employed mortgage? |
|---|---|---|
| 6 months to 1 year | Starting self-employed without annual figures | Yes, very limited options |
| 1 year to 2 years | Starting freelancer limited annual figures | Yes, limited options |
| 2 years to 3 years | Starting freelancer limited annual figures | Yes, plenty of options |
| 3 years or more | Not a starting entrepreneur | Yes, very good options |
Required documents self-employed mortgage
For the mortgage application as a self-employed person, you will need a number of additional documents in addition to the ‘normal’ required documents. In most situations, these are the following pieces:
- Income tax returns for the last three years;
- Definitive annual figures for the last three years (although the information from the income tax return is often sufficient for small companies);
- If you have been working as a self-employed person for less than three years or if you are a rapidly growing entrepreneur, you can add a forecast from an accountant. This then functions as a kind of estimate of your future income.
- Extract of Trade Register Chamber of Commerce (Chamber of Commerce). Chamber of Commerce registration (maximum four months old) is official proof of registration in the Trade Register;
- Your curriculum vitae (CV), to give the lender a clear picture of your background, education level and career career. This can be useful, for example, for doctors or lawyers in training;
Test income self-employed mortgage
Your so-called test income is determined on the basis of these documents together. This can be determined by your advisor Bliss or by an external party if necessary). Based on the test income, it is then calculated for what amount you can apply for a responsible, maximum mortgage. Also note the following points:
- Income is normally calculated on the average of the last three years. The past is standardly looked at to determine a stable income;
- Have you been an entrepreneur for less than three years? Then most lenders take a discount from your figures in order to calculate more safely. A percentage of your taxable profit balance is charged. For example, in one year of entrepreneurship this is 70% and in two years 85%. However, some lenders also work with 100% of the average of the years in which the company is active. This differs per lender.
- Have you earned less than your average income in the past year? In that case, this last year will be used as the test income.
- The current financial year is included in the assessment. Depending on the time of your application, you will therefore have to submit half-year figures for the application for your mortgage. Your current income must therefore be in line with your average income. It is checked whether the trend continues or whether there is perhaps a trend break.
The required documents and the amount of your assessment income always depend on your own personal situation and wishes. Do you have your own resources and do you want to contribute this money to the mortgage construction? Do you or do you not have a partner with a permanent job? What is the income security of your profession and what is your educational background? Can you return to permanent employment with an employer? It all plays a part in your mortgage application. It is therefore wise as an entrepreneur to always check with your mortgage advisor.
Zzp Mortgage with NHG
Would you like to take out a mortgage with National Mortgage Guarantee (NHG)? In addition to the above documents, you also need a so-called Income Statement Entrepreneur. From 2019, this is even mandatory for a mortgage with NHG. You are also eligible for this if you have only been working as a self-employed person without staff for one year.
With an Entrepreneur’s Income Statement, your test income is determined on the basis of your average income of the last three calendar years. If you have been an entrepreneur for less than three years, there are options.
You can have such an Entrepreneurial Income Statement drawn up by one of the following calculation experts:
- Overviewz in Barneveld
- Raadhuys Tax Legal Accounting in The Hague
- Pentrax advice in Nijmegen
- Business income in Nieuwegein
Please note: the Entrepreneur’s Income Statement is valid for six months. It is therefore wise not to request the document too early when applying for financing.
In practice, good opportunities for freelancers
As Bliss, we are happy with these extra options for freelancers. We speak daily with entrepreneurs, most of whom have often been active for less than three years. Yet many self-employed workers already manage to earn a good income in a short time, a lot more than if they could earn as an employee. The development that more and more lenders and the Home Ownership Guarantee Fund are responding to the growth in the number of entrepreneurs and the capacity to realize an excellent income in a short term is a good step forward for the group of highly educated self-employed.
Would you like to know what opportunities you have as an independent entrepreneur in the mortgage world? Contact us for an appointment when it suits you, for example during the day, in the evening or at the weekend and let us advise you without obligation . We have extensive experience with customization and are happy to think along with you!
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