Self employed mortgage
Despite the government now providing more support to encourage people into self-employment, banks do not seem to have taken much notice of the changing trend that has seen self-employment figures in the UK rise from 3.8 million in 2008 to 4.6 million in 2015 (source: Office for National Statistics).
Instead of understanding that self-employment is probably just as ‘safe’ as a permanent job these days, high street banks continue to impose strict criteria on mortgage applications that make what should be a very simple process, a very difficult and stressful one.
Years ago, banks allowed self-employed workers to self certificate their earnings, which whilst you can understand they had to remove this because people took advantage of it, gave self-employed people a better chance of getting a realistic mortgage based on their income.
Whilst high street banks are not very flexible when it comes to self employed mortgages, you may find that you will have a much better experience (and rates!) is you speak to a self employed mortgages specialist. There are many companies out there that are happy to support self employed people to get a mortgage with good rates.
One of the standard conditions for self employed mortgages is to provide at least two years’ worth of accounts, or sometimes even longer depending on the lender. If you are unable to provide these then many lenders will give you a definitive ‘No’ to any mortgage application. That is why you would always be recommended to speak to a self employed mortgage specialist who can understand your working status and provide more flexibility than the high street banks.
Whether you are looking for a first-time buyer mortgage or you want to move house, applying for a mortgage really doesn’t have to be as difficult as the banks’ processes make it. A number of specialist lenders will provide you with a mortgage based on 12 months trading records, so if you’ve only just gone into self-employment you still have the opportunity to get a mortgage.
Having said this, there are also a lot of self employed specialists that only offer higher interest rates to self employed workers, so it is definitely worth spending some time researching and shopping around for the best deals. A mortgage with a high interest rate could cost you thousands over a 25 year period so make sure you get the best deal available if you’re looking for self employed mortgages.