Self Employed Mortgages:
Details of the self employed mortgage solutions available from Shire Direct...
Welcome to our Self Employed Mortgages page where we'll take a look at our self employed mortgage solutions for those who happen to be self employed and require mortgage funding.
We'll explore how being self employed doesn't have to be a problem when it comes to getting a mortgage. We'll also discuss the traditional method of proving your income if you are self employed as well as the more innovative solution of proving your income - the self certification mortgage which allows the borrower to obtain a self employed mortgage with no accounts! We'll also investigate our self employed mortgage solutions for those with bad credit problems.
Self Employed Mortgage solutions -
table of contents:
Being Self Employed has many problems - getting a mortgage needn't be one of them!
If you are one of the three million people in the UK who are in self-employment, it's highly likely that during the process of applying for credit, finance or a mortgage you may have had some aficionado look down their nose at you, and you have felt, with some justification, that you have been discriminated against. Sound familiar?
There is no question that fluctuating income and profits can create problems for those working in business on their own account, unlike those that are in regular employment, who are able to produce payslip's. And naturally, before agreeing to mortgage lending, one of the main features on which a lender will need assurance, is that the borrower has the ability and willingness to make their contractual monthly mortgage repayments.
So how do self-employed borrowers prove their income and what if I can't provide accounts?
Traditional methods of proving your income...
Firstly, most conventional mortgage lenders will only consider a self-employed borrower's Net Profit to calculate the amount they will lend, as opposed to the gross income earned by an employed person. Your accountant in doing their job, will of course legitimately do their utmost to ensure you pay as little tax as possible by offsetting as much expense as he can against your earnings, which tends to backfire when you require the highest Net Profit possible to achieve your desired level of borrowings. It's a perfect example of having your cake and not being able to eat it!
Traditionally then, if you are self-employed and require mortgage funding, lenders' require three year's audited accounts, and will take the average Net Profit earned in the preceding three years. There are exceptions, and some lenders nowadays have adopted a more flexible attitude, and may accept two years accounts, and an accountant's projection; although you may well have to pay a larger deposit.
Fortunately, there are more innovative mortgage solutions available for those borrowers who are self employed and having difficulty proving their income or providing accounts as we'll discuss next...
A more innovative method of proving your income - the self certification mortgage...
So, as we have seen, the main areas of difficulty for self-employed borrowers achieving their mortgage requirements, will generally fall into one or more of the following categories:
- You may be in a "Start-up" situation
- You don't have three years Accounts
- The profits shown on your accounts don't reflect your current income
- You have experienced credit problems in the past.
The answer to this problem may be Income Self Certification by way of a Self Cert Mortgage.
Thankfully many lenders have now recognised that the self-employed sector of the market place is huge, with something in the order of three million self-employed people in the UK. Many lenders have, in the last few years, made progressive strides to accommodate the anomalies associated with the affordability of mortgages for the self-employed borrower, by the introduction of income self-certification schemes.
Self Employed Mortgages with no accounts...
Although Self Certification Mortgages don't require proof of income by way of accounts, borrowers will self-certify the level of their earnings, which the lender accepts. They will base their judgement on this self-certified figure, provided that the income stated is feasible, and commensurate with the borrower's trade or profession.
This commonsense approach means that at last many lenders are now able to assist many more borrowers, despite the fact that the self-employed have different needs to those who can rely on a regular income. However, it would be foolish to attempt to misuse income self-certification to obtain mortgage funding that is unaffordable. This would simply 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.
Can Shire Direct still help me with a self employed mortgage solution even if I have bad credit?
In most instances, you'll be happy to know that there are self employed mortgage solutions for those that have bad credit issues or difficulties.
As ever, this will depend on your individual circumstances and the level of adverse credit that you have registered against you. For minor or older credit difficulties, you would generally be able to borrow up to 85% - 90% loan to value (LTV), whereas if your credit difficulties have been more serious, you may be restricted to 75% LTV.
Shire Direct specialise in providing mortgages and loans for self-employed borrowers, and by contacting us you could well save yourself considerable time and money. Obviously as professional mortgage brokers we know exactly those lenders that will accept you as a self-employed borrower, and by the same token, those that won't! We also have access to exclusive products, many of which are not available on the high street.
Why not get in touch today to discuss your self employed mortgage requirements!
So, if you are self-employed and interested in arranging a mortgage, 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.
Here at Shire Direct, we have the approach, experience and skills to assess your requirements and circumstances to ensure that you are provided with the most suitable mortgage product that is affordable now and into the future. We're not judgemental, and look for reasons to accept your business, and provide you with an appropriate and suitable self employed 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 mortgage advisors are available on Freephone 08000 282 281 up to 10.00pm everyday, and we'll be delighted to provide you with a rapid in-principle decision, and we'd love to hear from you, or enquire online at any time.
That wraps up our look at Self Employed mortgages and how we can help with a self employed mortgage solution, we hope you found it useful. Don't forget we're only ever a free telephone call or couple of mouse clicks away and we'll be delighted to help in any way we can.
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.
