Getting a mortgage when self-employed
According to the research, many are worried about being rejected due to the strict rules on proof of earnings at high street lenders and the lending specialist has found that self-employed people are selling themselves short when it comes to their aspirations of being a property owner.
The UK’s 4.8 million self-employed do have reason to be concerned, as Together’s research shows around 21 per cent of self-employed borrowers who have applied for a mortgage have been rejected, with a fifth of them being turned down more than four times.
In fact, two-thirds (65 per cent) of self-employed workers have found the process so bruising they have considered switching to the security of a directly employed job to boost their application chances.
Why the rejection?
Often finding it hard to vouch for their wage, they are finding it more challenging than employees to secure a mortgage as they are required to provide far more evidence of income than other borrowers.
The main reasons for being rejected by high street lenders cited by one in four self-employed borrowers were: a lack of recent tax returns; irregular or insufficient income; and the mortgage requested being too large. One in five (20 per cent) of self-employed borrowers said they were denied a mortgage because they didn’t have enough proof of future earnings.
Pete Ball, personal finance CEO at Together, said: “These findings are understandable, but the fact that so many people are doing themselves out of owning their own home because they expect rejection is very worrying.”
“The way people live and work has changed enormously over the past few years, and it doesn’t make sense for the mortgage market effectively to lock out such a large group as the self-employed simply because of the way they earn a living.”
Speaking to a mortgage broker
If you are worried about being rejected for a mortgage, then speaking to a whole of market mortgage broker such as Try Financial Ltd who have access to specialist lenders with products more specially catered to an individuals needs, that the high street simply do not offer.
We invest our time to develop a better understanding of applicants’ circumstances in order to be able to help them, and with access to panels of lenders that high street banks may not have, we may be able to offer a better solution that will likely get you accepted.
Mortgage brokers such as Try Financial have to ensure the mortgages are affordable for the borrowers, but that should not be done at the expense of making it harder for the self-employed. Specialist lenders can take a more understanding view and have the skills and capability to deal with such applications, but almost half (47 per cent) of self-employed workers aren’t aware there are providers which can help.
This is why calling Try Financial and discussing your circumstances with us, can help us get a better understanding of your requirements and whether you are likely to be accepted, or if we can look for an alternative solution.
Get in touch with the team today on 01473 462288 or email firstname.lastname@example.org to see how we can help and remember, it never hurts to talk.