For anyone looking for a mortgage, finding the right lender can be a difficult task. There are dozens of lenders to choose from, from the big high-street banks and building societies to smaller, more specialist lending companies; each lender has its own unique range of mortgage products, and can vary significantly in the criteria they use to assess mortgage applications.
If you are self-employed, the quest to find the best mortgage can be even more complicated, as not all lenders take the same approach to assessing self-employed income, with some being distinctly more “self-employed friendly” than others.
Finding the best self-employed lenders
Traditionally, it has been more difficult for self-employed people to get a mortgage from some of the mainstream lenders. The self-employed don’t have the benefit of employer’s payslips to verify their income, and many lenders have either lacked the experience to assess self-employed income with regard to mortgage affordability, or have had mortgage underwriting criteria that weren’t up to the task of recognising the sometimes irregular and variable income of self-employed people. These difficulties were exacerbated by tightened lending criteria following the 2007 financial crisis, which left many self-employed people struggling to get a mortgage from mainstream lenders.
There are signs to suggest that is starting to change. The nature of the UK workforce is changing; around a fifth of workers are either self-employed or on a fixed-term or “zero-hours” contract, and that proportion is ever increasing. Some of the big-name lenders, including Halifax, Barclays and Clydesdale Bank, have realised that shutting out the self-employed could harm their market share in years to come, and have changed their lending criteria to be more amenable to self-employed mortgage applicants.
There is also a thriving market in smaller, more specialised self-employed lenders. It’s often the case that these lenders, who have greater experience in assessing mortgage applications from self-employed people, can be more flexible in verifying and assessing your self-employed income. For example, while many lenders ask for three years’ worth of business accounts to verify income, some of the more specialist self-employed lenders may be able to give you a mortgage based on just your last year’s accounts.
How a mortgage broker can help
At Just Mortgage Brokers we have years of experience in helping people find mortgages with self-employed lenders. We’ve worked with self-employed people in all sorts of fields, and understand how different lenders assess affordability based on self-employed income. Contact us today and let us help find the right mortgage with the best self-employed lender to match your own unique circumstances.