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What are Self-employed Mortgages?
Until recently, it has been generally more difficult for the self employed to get mortgages.
Mortgage lenders have preferred to see income guaranteed by regular employment. This has however changed in recent years.
There are mortgage lenders who specialise in the self-employed, and most lenders will now be more likely to deal with the self-employed than ever before.
As a self-employed person that has been involved in a particular industry for years this will prove to be an advantage.
Lenders are particularly interested to see how employable you are in your chosen field. To be able to show regular, weekly work is important and supports the view that you can expect to have a regular income.
If you are new to a business this may prove a problem until you can demonstrate regular income as a more established business.
Self-employed that are on a short-term contract will benefit from being able to show that they have a regular contract with either the same employer, which has been renewed or have a pattern of renewal revolving contracts with others over a one or even a two-year period.
Contact a Self-employed adviser here today and see how we can help.
02072 68 68 00
How much can you borrow?
This will depend like most other mortgage requirements on how much you earn as a self-employed person and how much the property you want to buy is worth or is valued at.
Most lenders will loan up to 75% of the property's value and others many will go up to 90 or 95%.
Some may even let you have up to 100% - but you will probably have to pay a higher interest rate.
Lending policy and procedures vary from lender to lender and so can the income multiple calculations they work with.
For example;
- two and a half times both annual incomes
- three to three and a half times the greater income plus one year of the second income.
Give one of our advisers a call 02072 68 68 00 and see how much you can borrow.
Some lenders can use sophisticated credit scoring methods, where they examine your income and your outgoings as an individual as opposed to applying a general rule of thumb. Everyone has unique circumstances and therefore we prefer to look at self-employed people as individuals and support their application with direction to the most suitable lender.
It should always be remembered that how much you can borrow is not always what you can afford and costs of living have always got to be considered in association with lending commitments.
Costs involving the purchase of a home and its running costs should be all part of the budget assessment, which you should consider.
If you are a self-employed first time buyer it will always help if you can show that you have been paying regular rent for a similar amount to what your intended mortgage payments will be.
Which type of mortgage?
One of the most difficult aspects of organising a self- employed mortgage is deciding on the type of mortgage required. No one really has time to sort through the thousands of mortgage products available and that is where we can be of help.
Simply give us a call ~ 02072 68 68 00
You can then look for a good mortgage lender who is offering the type of self-employed mortgage you really want.
A-Z Mortgage types
Base rate Tracker : Bridging Loans : Buy to Let : Cashback Mortgages :
Capped Rate : Current Account Mortgages: Discounted Variable Rates:
Fixed Rate Mortgages:Interest only mortgages: Islamic Mortgages :
Mortgages in Principle : Repayment Mortgages :
Standard variable rate mortgages : 100%+ Mortgages :
With so many types of mortgages it could pay to get professional mortgage advice that will help you through the Mortgage Jungle.
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