Last reviewed on 7th September 2023 by Martin Alexander (Mortgage Advisor)
Mortgages for taxi drivers are often far from simple. If you’re an employed driver, then finding a mortgage should be straightforward. This is because you’re able to present payslips to lenders in order to satisfy their income assessments.
In contrast, being a self-employed taxi driver poses problems for this reason alone. Proving your income to a lender can be a struggle, as there aren’t any payslips to present, just accounts.
Having a mortgage broker who has experience in dealing with taxi driver mortgages can be very useful. Our specialists secure mortgages for taxi drivers regularly. A lot of the success is a result of how well mortgage applications are structured.
Can taxi drivers get a mortgage?
Yes, getting a mortgage as a taxi driver is possible. If you’re a taxi driver and need a mortgage, your occupation certainly shouldn’t hold you back from applying.
As a taxi driver, it’s likely you’ll be self-employed and applying for a mortgage with accounts can be difficult when compared to employed applicants. That said, there are many lenders that will consider mortgages for the self-employed, providing you have adequate accounts.
This doesn’t mean to say you can approach any lender and you’ll be approved. You’ll still need to structure your application and present your accounts in the best possible manner. Applying with a suitable lender will also increase your mortgage chances, but applying with a lender at random could result in you being declined.
Can Uber drivers get a mortgage?
If you’re an Uber driver, a mortgage is possible. Your mortgage will be assessed on your self-assessment, as it’s likely you’ll be a sole trader who’s self-employed. Your occupation as an Uber driver shouldn’t stop you from getting a mortgage.
How are mortgages for taxi drivers assessed?
Being self-employed certainly has its perks, but it can also cause a fluctuation in what you earn. It’s the same fluctuation in income that can cause lenders to worry. For instance, taxi drivers will write off tax-deductible expenses such as fuel, vehicle maintenance and insurance.
This is great as it reduces your tax bill, but it also reduces your net income amount. This isn’t great for when you need a mortgage, as lenders will use your net profit to calculate affordability. Furthermore, declaring a low income can cause huge issues when you need to borrow a specific amount to secure a property.
Lenders will make other assessments, such as credit checks and any other outstanding loans you have for example. If you have financial arrangements for cars or have had credit issues, getting a mortgage will be even more difficult.
Remember, getting a mortgage under these circumstances isn’t impossible. Our advisors specialise in ‘hard to place’ mortgages and have secured deals for borrowers that have previously been declined.
How to get a mortgage as a taxi driver
The process of getting a mortgage as a taxi driver isn’t much different from other applicants. The differences are typically in the way the application is assessed, due to income from self-employment. You’ll also want to speak to a mortgage advisor who has experience with applicants who are self-employed. This is to ensure your mortgage application is packaged correctly.
An advisor can also help you with the following:
- Gather hard copies or downloads of your accounts – This could be in the form of an SA302 which can be downloaded from the government gateway for the self-employed. You’ll need to present your accounts to your mortgage lender so they can assess whether the mortgage you’ve applied for is suitable. Lenders will typically ask for the last three years of accounts, but you may be approved with less.
- Check your credit history – Before approaching a lender, it’s recommended to check your credit file. This is because a low credit score or issues on your file can cause an application to be declined. A strong credit score with little or no issues will help your application and may mean that you’re able to approach more lenders.
- Find a suitable lender – Some lenders are better suited for taxi drivers as they’re more flexible with self-employed applicants. In comparison, there are lenders that you perhaps may want to avoid. An advisor can help you to do this, as we have an understanding of mortgage criteria.
Can taxi drivers apply for any type of mortgage?
If you need a buy to let mortgage, then some lenders may accept borrowers without having to prove their income. This is because certain lenders make assessments on the rental income that the buy to let can potentially generate.
That said, if you require a buy to let mortgage for a taxi driver, then you’ll want to be sure you’re approaching the right lenders. Approaching lenders who make assessments on income could result in your buy to let application being refused.
Mortgage advisors will have the knowledge and understanding of which lenders will make assessments without proof of income, so it’s still important to utilise a broker under these circumstances.
If you’re a taxi driver in need of a residential mortgage, then lenders will need to assess your income as a mandatory requirement. What you earn on an annual basis will more than likely vary from what you declare on your accounts.
This can be frustrating, as you know you’re more than capable of repaying a mortgage. Nonetheless, lenders will need to see clear evidence that your income meets the affordability of the mortgage you’re applying for. Certain lenders will be better suited depending on your own financial circumstances and the amount you need to borrow. This brings us to our next point.
How much can I borrow as a taxi driver?
If you’re a self-employed taxi driver, then most lenders will calculate your affordability based on three to five times your declared net profit. The reason why lenders vary in how they make assessments simply depends on their appetite for risk.
Lenders that offer more flexibility may stretch to five times your net profit figure. In comparison, lenders that are less flexible may only calculate your maximum mortgage amount to three times your net profit figure.
This is yet another reason why having a mortgage broker by your side can be so important. If you’re looking to borrow four to five times your net profit amount, then we’d highly recommend consulting an advisor. This is so that your application is put forward to lenders that suit your criteria.
Our advisors specialise in taxi driver mortgages and can structure your application in the best way possible. Even if you’ve only filed one year’s accounts, there are lenders that may accept your application. You can also use our calculator for self-employed applicants to check how much you can borrow.
About the author
Martin is a senior mortgage advisor and has held a CeMAP qualification for over 15 years while also completing an MBA in Global Banking & Finance.