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.
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!
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.
Caboodle Financial Services Ltd
Mere Green House
46-48 Mere Green Road
West Midlands B75 5BT
Telephone: 0121 308 9114