Getting a mortgage as a taxi driver can prove more complex if you are a self-employed taxi driver. Many taxi firms will hire drivers on a self-employed basis or if you are a private hire you may not work for a firm and in this situation you are classed as self-employed. You may be trading as a sole trader or a limited company for tax purposes. The problem that many of our users have faced is getting declined for a mortgage by a high street lender. No matter how much you earn many high street lenders still prefer to lend to salaried/employed applicants. Due to their automated decision making salaried applicants can easily prove their income and there is no complexity to it, this makes them lower risk in the lenders eyes.
Mortgages for taxi drives are more complex than a typical application due to the expenses that come from car repairs, fuel, insurance etc. Many lenders and also brokers do not understand these necessary tax deductible expenses, these expenses reduce your overall profit for the year which can make some lenders cautions and not willing to lend.
At Get Me My Mortgage we work with a network of specialist mortgage brokers with experience and relationships with specialist lending. A specialist broker can help to package your application in a positive way and search the whole market, including specialist lenders to help you find the best deals.
Proving your income as a taxi driver
As a self-employed taxi drive you won’t be getting a regular salary, this means that you cannot just supply pay slips as an employed applicant would. Instead lenders will need to see your business accounts or year end tax overview (SA302). This will give the lender evidence of your income and they will then use this to work out how much they can lend and your affordability. A lot of lenders, especially high street lenders will require you to supply 3 years of accounts to verify your income. If you have been self-employed for less than 3 years there are specialist lenders that our brokers work with that will base their lending decision on just 1 years’ worth of accounts.
In the past it was easier for self-employed applicants to get mortgages due to self-certification mortgages, this financial product was designed for the self-employed and applicants could declare their income without any evidence. This allowed for larger borrowing even if the applicant couldn’t really afford it based on today’s lending criteria. This type of lending is now banned so unfortunately if you cannot prove your income then you will be rejected by all lenders.
Getting the maximum mortgage amount
The maximum amount that lenders will be willing to lend is 5 times your income. This is the net profit or salary that you have taken, depending if you are a sole trader or an ltd company. Many lenders lower the risk by lending at 3 times income, some at 4 times. 5 times income allows you to borrow the most but to get this amount its best to use an experienced broker that has the knowledge of which lenders are likely to offer the best amount for your needs.
How can we help?
At Get Me My Mortgage we work with specialist brokers that have years of experience getting mortgages for taxi drivers and all other areas of self-employment. We can help you to get the best deal on your new mortgage or remortgage. If you have been declined by a high street lender it’s still worth getting in touch and our brokers will find the best route for you. Whether you only have 1 years accounts, a first time buyer or looking for a buy to let mortgage get in touch on 0191 442 38 44 or fill in one of our enquiry forms today.