Claims are being made that self-employed mortgage applicants who have taken parental leave are being denied loans even though they are proving their income.
Workers in regular employment who take maternity or paternity leave do not have problems obtaining a mortgage when they return to employment, but brokers state that it is proving almost impossible to find a deal for a self-employed customer in the same circumstances.
According to Independent James, a broker based in London, someone who is self-employed and has a consistent income of £100,000, but takes one year out of work due to maternity leave, would be told that their income is volatile, even if documentary evidence was provided of income projection.
In an interview with Financial Adviser, James Carter, the principal of Independent James, said that lenders also restrict the size of the loan, as there is a lower income during the period of leave. The director and financial planner at Evolution for Women, Rebecca Robertson, said that lenders generally use the last year’s self-assessment, which is the period when the person is likely to only receive statutory maternity pay rather than regular income.
Lenders who responded to Financial Adviser all said that they would look at these applications on a case by case basis. Mortgage advisors take a CeMAP training course so that they can help to find lenders who are willing to offer mortgages to those who have special requirements from a mortgage, like those who are self-employed.
