Mortgage Brokers to the rescue for Contractors and the Self Employed

Monday, December 12th, 2016

Recent surveys undertaken by specialist mortgage lenders indicate that many potential applicants regard themselves as a higher ‘mortgage risk’ if they are self-employed, a contractor or have multiple income sources.

For many people, even just applying for and obtaining a mortgage can seem like a daunting prospect, but in the case where an applicant’s personal circumstances also may not really ‘tick the box’ for many lenders, then that experience can also become hugely frustrating for the applicant too.

Although some mortgage lenders will exclude certain ‘categories’ of applicant from their lending policy, there are very often a limited number that will give positive consideration to people falling into one or more of the ‘categories’ mentioned in our opening paragraph.

Find the right lender with a Mortgage Broker

For those who wish to, locating these lenders is not always an easy task, and even if they can be tracked down through extensive online research or by making multiple appointments, being able to compare what products they offer at any point in time can be another matter altogether.

Alternatively, by engaging the services of a specialist mortgage broker such as Caboodle Financial Services Limited, an applicant can get the advice they need and review the most applicable products.

It is for this very reason that over half of the respondents to the survey had used a mortgage broker to source and arrange their mortgage and of the ones that had not used a broker, almost 80 per cent reported that with hindsight, they wish they had done so!

Proof of income can vary…

Essentially, mortgage lenders can take very different views when it comes to things like employment status and how an applicants’ income can be “proven”, especially when it comes to the self-employed or contractors.  For the self-employed some will use accounts, others HMRC SA302’s and a few lenders will send a reference for their Accountant to complete. If that is not complicated enough, the figures lenders use as the applicants ‘income’ when assessing a mortgage application can vary significantly too, including: net profit before tax; net profit after tax; salary and dividends; salary and share of net profit. To top it all off, there are also certain rules around year-to-year increasing profit, decreasing profit and business status. Phew!

For those that pursue this course alone, the variation in what each lender will want and then accept as ‘proof of income’ can often cause significant delays in the application process, or ultimately result in the lender declining the application. Alternatively, if the applicant has used the services of a specialist mortgage broker who fully understands each lenders’ requirements (and is therefore able to compare what each client has available to what the lenders will accept), that broker will seek to create a match at the outset to ensure the most suitable lender/product is selected resulting in a much more efficient process and often much better outcomes.

If you would like to discuss your individual requirements or make a confidential no obligation enquiry, call Caboodle Finance, Mortgage Brokers of Sutton Coldfield, Birmingham today on 0121 308 9114 or alternatively just click HERE to contact us and we will be delighted to advise you.

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Your initial consultation is free and you are under no obligation to proceed with a mortgage we recommend. There will be a fee for mortgage advice. The exact fee will depend on your circumstances and may be reduced depending on the loan amount and any commission we receive from the lender. It is estimated that the fee will be £595, but it may range from £495 to 1% of the amount you borrow. The fee is only payable on completion and can normally be added to the mortgage. This will be discussed and agreed with you before you make an application. Please ask for a personalised illustration.

Secured loan rates from 3.95% APRC, although we have plans available up to 29.9% APRC which allow us to assist customers with the most severe credit problems. The overall cost for comparison is 7.65% APRC. There will be a fee for secured loan advice and the exact fee will depend on your circumstances. The fee is only payable on completion and can normally be added to the loan. A lender fee may also apply. The actual APRC available will depend on your circumstances. All loans are subject to status. Please ask for a personalised illustration.

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Caboodle Financial Services Ltd, registered in England and Wales at Mere Green House, 46-48 Mere Green Road, Sutton Coldfield, West Midlands B75 5BT (number 08044670).
Caboodle Financial Services Ltd is an appointed representative of PRIMIS Mortgage Network (PRIMIS), a trading name of Advance Mortgage Funding Ltd which is authorised and regulated by the Financial Conduct Authority. PRIMIS is only responsible for the service and quality of advice provided to you in relation to mortgages, protection insurance and general insurance products. Any other product or service offered by Caboodle Financial Services Ltd may not be the responsibility of PRIMIS and may also not be subject to regulation by the Financial Conduct Authority. The Financial Conduct Authority does not regulate some forms of Buy to Let.

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