Self-employed workers aren’t applying for a mortgage because they think they will be rejected.
34% of self-employed individuals have never applied for a mortgage, according to our latest research.
Concerningly, many have not even tried for a mortgage because of the assumption they would be rejected as a self-employed individual.
15% said their business is less than two years old and therefore they don’t have the necessary documentation to prove their income when applying. This highlights the importance of understanding specialist lenders and the opportunities they may provide customers, by assessing income in a different way to make mortgages more accessible to those with complex income structures.
TML Case Study:
We progressed a complex, self-employed residential mortgage application in just 10 working days, while demonstrating our real-life lending approach through the process.
The clients, who were a couple trading as Limited Company directors, sought a mortgage for a new build property. The case presented itself as more complex as it progressed, due to a change in company structure part way through the application.
To help maximise the client’s borrowing capability, we assessed the self-employed couple’s affordability on net profits before tax. This gave the borrower an increased capacity to borrow a higher loan amount. We also used the applicant’s latest year’s trading figures rather than an average from the last 2 to 3 years, which would have included any impacts from the Covid-19 pandemic. This, alongside our ability to account for the client’s shareholding value increasing, allowed the client to borrow an even greater amount for their property.
How can we help:
- Income based on latest year’s accounts
- Profit before tax, plus salary used for affordability, for Ltd Company Directors with over 25% shareholding
- Minimum of 12 months trading up to 90% LTV
- Most recent year’s certified accounts OR Tax Calculation (SA302) with Tax Year Overview acceptable as income evidence
Speak to your local TML Business Development Manager or call their Business Development Hub on 0344 257 0418 to find out more.
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