If you a starting a new business in the UK, either as a Ltd company or sole trader, then you need to be aware of this before you quit your job!
People are often so focused on how to start a business that they don't realise the potential impact it can have on their ability to get credit.
Becoming self-employed makes it a lot more difficult to get a mortgage or remortgage as lenders treat self-employed borrowers differently than employees.
Employees are often able to get a mortgage with only 3 months of payslips, whereas self-employed applicants often need to provide 2 to 3 years of earnings history.
Self employed mortgages are available in the UK but the requirements are a lot stricter than they used to be before the global financial crisis.
It doesn't matter if you are a sole trader or a director of a Ltd company, the mortgage provider will still class you as self employed.
Have you had any issues getting a mortgage as a self employed applicant? Let me know in the comments below!