Mortgages for self-employed rates may be at record lows. But this is no use if you can’t access them. The self-employed, in particular. Have found it harder to get a mortgage during the pandemic. They are regarded as being riskier due to potentially fluctuating incomes. And lack of an employer to vouch for their income. With lenders tightening criteria because they are keen to reduce risk. At such an uncertain time, and applications receiving even greater scrutiny. The self-employed have been it hard.
Some lenders will not consider self-employment income support scheme government grant. As income when deciding how much to lend. Tough on those whose pay dropped during the pandemic but has now recovered. All this is particularly frustrating for the self-employed. Whose businesses have thrived during the pandemic and who now wish to buy property.
Finance for IT Industries
It is particularly tricky for contractors working across the IT, finance or construction industries. With contractors earning a day rate via a limited or umbrella company. Not every lender properly understands how they are remunerated. The added complication of IR35 regulation from 6 April. A tax change moving the tax liability for contractor status. From the individual to the employer and designed to bring contractors’ pay into line. With those who are employed, has not helped. Lenders are scrutinizing contracts more closely than ever. And may be concerned if tax is not properly accounted for. It may need to be paid back. Which could impact the contractor’s ability to pay their mortgage.
Many lenders say these measures are only temporary but for contractors. Sole traders and limited company directors. Who want to buy property now, that isn’t terribly helpful. To make matters worse, lenders each have their own criteria. With some more flexible towards self-employed borrowers than others.
This is why a whole-of-market broker such as AWS Private Finance, is essential. While many high-street lenders don’t properly understand. How the self-employed are paid. Particularly contractor remuneration, there are some lenders. Who do understand and offer specialist products. Our brokers know which lenders will treat you most sympathetically. As well as understanding what documentation they require. We have plenty of experience in arranging contractor mortgages. We can guide you through the process. You must prepared yourself properly, when it comes to applying for a contractor mortgage. Please get in touch for more information.