A helping hand for self-employed borrowers

October 28, 2014 by Brendan O'Neill

Lenders

There are a growing number of self-employed people upon whom, according to the government, the economy’s recovery depends. It has often seemed that no matter how successful their business was, they were frequently refused mortgages, but some lenders have recently changed their lending policies to accommodate this borrower sector.

The trouble for self-employed individuals started with the credit crunch, when it initially became really challenging to obtain secured borrowing. This became tougher following the Mortgage https://www.beaconfinancialtraining.co.uk/wp-content/uploads/2020/06/cemap-online-and-classroom-training-uk.jpget Review in April. New regulations made it more difficult to prove the affordability of loans, with the vast majority of lenders insisting on seeing the last three years’ accounts to validate income. Those who worked as contractors had to show that their current contract had a minimum remaining term of six months, along with a two-year record of working.

Many high street lenders still have specific lending criteria that they work with. However, there’s an increasing number of providers who will assess borrowers who are self-employed with one year’s completed accounts, including Halifax.

Dominik Lipnicki from Mortgage Decisions, a broker service provider, said:

“It really pays to have up-to-date accounts prepared by a qualified accountant.

“If you scrape through with the bare minimum of paperwork your options will be very limited and you’ll probably end up paying a higher rate.”

Once mortgage professionals have completed their CeMAP training and attained the associated qualification, they can take confidence in the fact that they will be able to have quality conversations with their clients, factoring in their employment status and advising them on the most appropriate mortgage solutions.