There
are now many, many people in the UK who are often treated
differently by mortgage lenders to those who are in permanent
employment. We do not understand why some lenders are so negative
to the self employed. After all an employed person can still
lose their job!
If you are self-employed and have three years up to date
accounts showing healthy profits you usually won't have a
problem getting a mortgage. However, if, for example, you
have only been trading 12 months you may not find it so easy.
If you are on a short-term contract of employment, or have
your own company and pay yourself most of your income in dividends
you may also find it difficult to find a sympathetic lender.
We have been arranging self employed mortgages for many.
We are fully aware of the difficulties self employed clients
face. These could be -
1. |
You have only been self employed for a year. |
2. |
Your last three years average self employed income is
low due to one bad year. |
3. |
Your last three years average self employed income is
low as you made small profits in your early years. |
4. |
Your accountant has used legitimate tax avoidance methods
to minimise your self employed income which means you
cannot borrow enough. |
5. |
As you are self employed, you have been busy running
your business and have got behind in preparing your accounts. |
6. |
You are self employed and have income from a number
of sources. |
7. |
You have income from sources which most banks will not
take into account - eg property rentals and other
investments. |
Self certified mortgages enfranchise those who can’t
prove their income in the traditional way through PAYE pay
slips or three years accounts. The beauty of a self-certified
mortgage is that you can state your income without having
to provide your lender with conventional forms of evidence.
The lender will normally take your declaration on trust and
not check it.
That said, you should never overstate your income, as you
may well get into difficulties if you take on more debt than
you can afford. It is also our understanding that it is an
offence to exaggerate your income.
Verification of income varies from lender to lender. Most
will check where you live via the electoral role and consult
Credit Reference Agencies. Lenders may also take into account
your overall financial circumstances, such as the number of
children, credit card borrowing and other debts such as unsecured
loans.
Some will ask your accountant to verify that you are able
to meet the payments without asking for proof of income. Other
will ask for permission to check with the Inland Revenue that
you have the level of income you have claimed.
There are some lenders who offer what we consider to be true
self-certified mortgages. These offer self certified mortgages
without any proof of income.
There was a time when a self certified mortgage would have
a slightly higher rate than for a standard mortgage. Recently
there has been so much competition in this market that the
rates on offer are more and more competitive.
If you want to borrow up to 90% of the property value there
are only a few lenders that will consider helping. There are
many more lenders willing to help if you want to borrow up
to 85%. If you can afford to borrow less than 75% of the value
of the property for a house purchase or a reportage than still
more lenders will help. Interest rates here can be very attractive. 'Typical overall cost for comparison 7.6% APR. The actual rate available will depend upon your circumstances. Ask for a personalised illustration'.
But how do you find the right deal for you. There are a large
range of self-certified mortgage lenders on the market. We
believe all clients have a unique set of circumstances. If
you contact us, we can look at your circumstances in confidence.
We have powerful mortgage software which is updated daily
over the Internet. This means we have access to up to the
minute information on the whole of the mortgage market. Using
this we can scour the market for you and identify the most
suitable deals that meet your particular needs.
We will steer you through the minefields of a lenders redemption
penalties, and higher lending charges -
should these be applicable to you. We are also happy to talk
you through the main repayment methods.
Our service is not redistricted to our local area. We have
clients all over Great Britain. We are able to help wherever
you are in the UK. If you would like to discuss you circumstances
in confidence, please do not hesitate to get in touch on City
Investments 01244 317788
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