A look at Self Employment Mortgages and how Shire Direct can help!
Shire Direct specialise in providing mortgages and loans for borrowers in Self-Employment who for one reason or another, don't quite fit the mould!
"Starting to feel there's a light at the end of the tunnel, thank you"
Mr G., Oakwood, Derby
Here, we take a closer look at Self-Employment Mortgages, and why many people in self employment have experienced difficulty when it comes to borrowing. We'll explore why this needn't be the case, and take a look at how we can help with mortgages for self-employment.
Table of Contents:
Self-Employment Mortgages explained
Anyone who is in self-employment will undoubtedly be aware that it can have it's difficulties, but getting a mortgage needn't be one of them!
If you're in business on your own account, you will have probably, at one time or another, been given the cold shoulder when it comes to borrowing money.
Why? Well it often boils down to the fact that you can't have your cake and eat it as well! It's one of your accountant's prime functions to mitigate your profits by presenting your financial statements in such a way that you pay less tax. Of course traditional mortgage lenders, whether they are high street banks, building societies or centralised lenders, tend to like to see regular employed income. And if you are in self-employment, most conventional lenders will require an accounting profile of three years audited accounts that show a net profit to support the borrowings.
It's true to say that not all lenders embrace borrowers in self-employment, partially because they don't understand the greater degree of flexibility that may be required, nor will take into account the inconsistencies of trading patterns. They often seem to miss the underlying strengths of business entities and the hard work and effort that self-employed people give to their businesses.
Here at Shire Direct, we specialise in providing mortgages and loans for self-employed borrowers, who, for one reason or another, don't quite fit the mould!
This may be for one or more of the following reasons where your available accounting profile is not considered as being compatible with high street requirements because of one, or more, of the following reasons:
- You're in a "Start-up" situation
- You don't have three years Accounts
- The profits shown on your accounts don't reflect your current income
Over 3 million people in the United Kingdom are now in self employment, and so in recent years, the more progressive mortgage lenders have responded to this huge potential market, by making special provisions for those borrowers who work on their own behalf. Special treatment has been needed because traditional income multipliers and requirements have become too restrictive to assist the many potential good borrowers that were often denied mortgage funding.
Self-Employment and the Advent of Income Self-Certification
There has, in recent years, been a shift by many more lenders to consider applications from the borrower in self-employment who may have difficulty in providing a suite of three year's audited accounts to show net profits to support the traditional income multipliers.
Why? well, there has been a much deeper and better understanding by many lenders and underwriters, together with a demonstrable track record of borrowers who have successfully operated their accounts without difficulty. The sheer size of the marketplace has also driven many lenders into exploring the feasibility of lending to borrowers in self-employment who have the ability and willingness to pay.
As we have discussed above, those in self-employment have this peculiar advantage of being able to reduce their tax liabilities by offsetting expenditure that employed people can't! So accountants tend to mitigate profits for tax purposes as heavily as possible to ensure the various allowances are utilised. This of course leads to reduced profits, and therefore lower tax bills paid by company directors and traders in self-employment.
For a self-employed borrower to produce three consecutive years accounts showing healthy net profits, it will inevitably take several years from the commencement of trading. Fortunately, lenders now have statistical trends to show that where self-certificated income has been used properly, they have sufficient evidence to be confident that their lending skills have been justified.
Self-Employment Mortgages: A look at Self-Certification and Affordability
It would be foolish and self-deluded to attempt to misuse income self-certification to obtain mortgage or loan funding that is unaffordable, and simply could lead to the road to ruin! As a responsible mortgage intermediary, Shire Direct will carefully assess your circumstances and your potential financial means to achieve mortgage funding, however the unrealistic exaggeration of your income to achieve mortgage funding is a criminal offence and could result in an action for fraud.
Here at Shire Direct, we have the experience and expertise to assess your requirements and circumstances to ensure that you are provided with the most suitable self-employment mortgage product that is affordable now, and into the future.
I'm in self-employment and require a mortgage, but have a poor credit history! Can Shire Direct still help me?
Usually, the answer is "Yes"!
Many borrowers in self-employment have encountered previous credit difficulties, such as County Court Judgements (CCJ's), mortgage arrears, or defaulted credit accounts. You may have experienced more serious credit problems, for instance you may currently be in an Individual Voluntary Arrangement (IVA), or even had a previous bankruptcy.
We're confident that a quick call to one of our experienced mortgage experts will assure you that our service is friendly, yet professional, helpful and accommodating. We're not judgemental, and look for reasons to accept your business and provide you with an appropriate and suitable mortgage solution. We'll discuss your requirements, and carefully explore all the options available to you, and you'll find that we can usually come up with a solution - even in the trickiest of circumstances!
So, please don't hesitate to Contact Us if you would like to discuss your requirements - naturally without obligation! Our professionally qualified and experienced mortgage advisors are available up until 10.00pm everyday, and we'll be delighted to provide you with a rapid in-principle decision. So call us now on Freephone 08000 282 281, you'll be glad you did! Alternatively, you can also enquire online at any time, we assure you of a rapid response, and will be delighted to help in any way we can.
Well, that wraps up our look at Self-Employment Mortgages and how Shire Direct can help with a mortgage for those borrowers in self-employment. We hope you found it to be useful, and that we successfully managed to answer any questions you may have had. Don't forget, there is a wealth of mortgage related information throughout this website, and that we're only ever a free telephone call, or couple of mouse clicks away and would love to hear from you!
The overall cost for comparison is 9.8% APR.
The actual rate available will depend upon your circumstances. Ask for a personalised illustration. APR variable and based on a usual case. Most customers are likely to receive a lower rate or the same rate as our overall cost for comparison rate - learn more about APR.
There are no upfront broker fees.
However, a fee may be charged on successful completion. An indication is that on conforming cases (straightforward applications with no or minimal adverse credit) a fee may be charged of up to 1% of the amount advanced, typically £795 and will depend on your circumstances.
For non-conforming cases (where case research and processing may be more complex due to adverse credit or unusual circumstances), a fee may be charged of up to 3% of the amount advanced, typically £1,995.
THINK CAREFULLY BEFORE
SECURING OTHER DEBTS AGAINST YOUR HOME.
YOUR HOME MAY BE REPOSSESSED
IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.
Adding existing debt to your mortgage will increase the repayment term and overall cost.
Are you worried and becoming stressed because you are having problems getting a mortgage or remortgage? Worry and stress no more! Here at Shire Direct we provide tailor made mortgage solutions to suit you, and can usually help with all kinds of circumstances including...
Remember, we're here to help, and would love to hear from you!
Over £2,000 worth of Argos Vouchers to be won in the Shire Direct Grand Prize Draw 2008! Terms and conditions apply - please read article for full details.
Claim £100 worth of Argos Vouchers upon completion of your transaction throughout 2008. Terms and conditions apply - see our Vouchers Special Offer page for full details.
Shire Direct and Shire Direct Mortgages are trading styles of Shire Processing Centre Limited which is
Authorised and regulated by the Financial Services Authority in respect of regulated mortgage products and general insurances.
Registered No: 302389. Commercial funding and Secured Loans are not regulated by the FSA.
Licensed Credit Brokers. Consumer Credit Licence Number: 349999.
Shire Processing Centre Limited is registered under the provisions of the Data Protection Act by the Information Commissioners Office: Registration No: Z6795249. Registered in England & Wales. Company number: 2732202. Telephone calls may be recorded for training, monitoring and security purposes. All applicants must be aged 18-years or over.