Mortgages for Self-Employed Workers

Getting a mortgage based on self-employed earnings is tougher than it should be. But even if High Street lenders have let you down, your situation’s far from hopeless.

Through the right channels, you have as much mortgage choice as PAYE-employed people. You’ll find interest rates on par, too.

Whether you’re buying your first home, remortgaging or moving home, we cover them all. So why do High Street lenders so often make buying a home such an ordeal for the self-employed? That’s the question we’re going to explore—and answer—here.

The self-employed mortgage landscape: before and after the credit crunch

Up until 2007/8’s credit crunch, self-employed people could get “self-cert” mortgages. With these, it wasn’t compulsory for lenders to ask for proof of earnings.

I know. Unthinkable today, right?

Instead, advisors took applicants at their word: what they claimed to earn was ‘evidence’ enough. Lenders accepted or declined on that basis alone, without running further checks.

The demise of self-cert mortgages

Self-cert became the go-to mortgage for company directors, sole traders, freelancers and contractors. They often came with punishing interest rates. But, for people without regular payslips, they were a hassle-free option.

But PAYE employees soon cottoned on. If their salary didn’t cover the mortgage they wanted, they turned to self-certification, too. Soon, all borrower types were abusing self-cert mortgages, exaggerating their income to get larger home loans.

In 2008, this systematic abuse led to the FCA (now FSA) outlawing self-cert mortgages. Since then, all self-employed applicants have had to provide genuine ‘evidence’ of their earnings.

Determining self-employed risk, income and affordability

Where that causes problems today is that lenders have differing ideas of what constitutes evidence. That’s compounded by how they work out mortgage affordability after determining a ‘salary equivalent’.

Therefore, few lenders agree on what self-employed risk is. Such ambiguity makes it all the more difficult to pin down exact self-employed affordability criteria.

The result is that self-employed workers often jump at the first offer they get. And given the barriers they face through traditional avenues, that’s understandable. Wrong, but we get it.

Act in haste, repent at leisure

Haste is never a good tactic, especially when it comes to your mortgage.

Buying a home is the single largest financial commitment you’re ever likely to make! Being forced into a corner isn’t the way we believe you should enter into that commitment.

Many of our clients have found out the hard way why knee-jerk reactions are wrong. Often, it’s not until they’ve approached us for a remortgage that they realise the mistake they made with their preceding mortgage.

A specialist broker can help self-employed people get competitive mortgages and remortgages. You don’t have to earn a salary or be an employee to get great interest rates. Let us show you a fairer way to buy your home.

Self-employed mortgages for people with unique circumstances

Mortgage Quest has built its reputation by helping all manner of self-employed workers. Through our established brands, none less than www.selfemployedmortgages.com, we understand which lenders:

• will offer you the best mortgage rates for your unique situation;
• are willing to use less than two years’ accounts;
• will utilise retained profits;
• can be flexible with their lending criteria.

Since 2004, we’ve secured mortgage finance for people with a range of different trading structures, including mortgages for:

• self-employed with their latest year’s accounts;
• self-employed with one year’s accounts;
• sole traders and partnerships;
• company directors;
• locum doctors and supply teachers;
• CIS workers;
• professional contractors.

How Mortgage Quest can help you

Selecting the right mortgage broker from the outset is key to securing a competitive deal. When you’re self-employed, having someone with knowledge, experience and a strong network on side is invaluable. Nay, imperative!

Our advisors talk to different mortgage lenders every day. We have our finger on the pulse of the market and have the ears of underwriters.

Our experience is critical to helping decide which lender will most favourably assess your self-employed affordability. We’re offering you the opportunity to leverage our network and what we’ve learned over time.

This expertise can help you find the right mortgage for your specific needs. We believe that no one is better placed to help you than us.

To get help with your self-employed mortgage, call us on 0208 421 7998, request a callback or enquire now.