By Ed Emerson
Despite working for yourself, and often making far more money than when you were in full-time employment, it sometimes feels like lenders are actively working against UK self-employed mortgage seekers.
The reason for this is simple: The vast majority of banks see those who operate as self-employed, consultants, company founders and company directors (with significant shareholdings), as a risky proposition.
Why? Well the short answer is that UK self-employed mortgage seekers simply don’t fit into their application process.
There’s no easily accessible and understood pay-as-you-earn (PAYE) report, no check on what they see as “steady earnings from a stable employer”, and the standardised box-ticking exercise they’re so used to just doesn’t apply.
So, like all things in life, you have to consider this from the other perspective in order to make it work.
The banks have paid heavily for their IT systems. And they are designed to handle the majority of PAYE applications they expect to receive, the compliance and underwriting procedures to adhere to the Mortgage Market Review (MMR) in 2014. MMR made the UK self-employed mortgage application process as onerus, inconvenient and awkward as a proctology examination.
And that’s for PAYE applicants as well (not the proctology exam).
This means you have to understand:
- The process
- Which documents you’ll need for a successful mortgage bid
- What you must do before you apply, and
- Who those lenders are who you should (and should not) apply to.
We know. We made just about every mistake that you can make in this process.
Want to know more?
Why not see what HNW Magazine’s Self-Employed Mortgages section here has to offer you in terms of advice, guidance and options.
And look out for HNW Magazine’s report The 5 Steps to a UK Self-Employed Mortgage out soon, and take advantage of the mistakes others have made so that you don’t have to.
Ed Emerson, Editor, HNW Magazine