For years now people working for themselves have felt disadvantaged when it comes to applying for a mortgage. We have heard it said many times that mortgage lenders do not like lending to these people and that they feel victimised.
The fact is that mortgage lenders are willing to lend to anyone subject to affordability, credit worthiness and criteria. Where the real problems lie is convincing a lender that you have sufficient real income to service the loan you are applying for.
Of course if you are employed this is easy and all you have to do is provide three wage slips to show you have the means to service the loan.
Working for your-self as a company director, self employed as a sole trader or partner or a contractor this is not quite so easy. Lenders will differ hugely in the information and proofs that they require to establish affordability. Unfortunately lenders counter staff and call room staff are not equipped or knowledgeable enough to provide an answer for this.
This is where we come in, Westexe Mortgages deal with the whole lending market and understand the differences between lenders and are able to determine the best lender to suit our clients own individual circumstances.
Company Directors: Most company directors take a small salary and pay themselves dividends on accountant’s advice to minimise taxation. Most lenders will insist on only using this income, which probably does not truly reflect the earning potential of the applicant, especially if they are retaining profit in the company. We have lenders who will also use the applicant’s share of the company’s net profit and in most cases this will vastly increase the size of the mortgage available. Sometimes the company has not been trading long enough or the applicants company becomes incorporated on accountant’s advice. We also have answers and lenders who will help in these situations.
Self Employed: Again there are massive differences here. Lenders will vary between requiring a minimum of three years trading to only one year’s trading. Some will average the last three years net profits, some the last two years and some will just use the most recent year’s net profit. At Westexe Mortgages we have the knowledge and answers to work out the best lenders to suit our client’s situation.
Contractors: Many lenders will not accept contract workers, but others will. The differences lie in how long have they been contracting and what term remains on the current contract. Some contractors even have complicated systems in place surrounding income received to minimise tax liabilities. It is our job to firstly understand the applicant’s sometimes unique situation and tailor the best solution for them.
Contact: Westexe Mortgages today on 01392 216 344 for free unbiased mortgage advice, we are here to help you, not to help the lender make more money.