In these uncertain economic times, more people than ever before are choosing to start their own company. Furthermore, the government has noticed that our service-based economy has led to a dramatic drop in qualified tradesmen (plumbers, mechanics etc.) and has taken a major policy decision to encourage small businesses, especially in applied trades.
That means more and more self-employed people- all of whom need homes to live in. The mortgage lenders had two choices: continue to treat the self-employed as less reliable mortgagees than ordinary employed people, or start to offer products to suit. Luckily the latter is the case.
There are really two types of self-employed mortgage. If you have three years of company accounts, (i.e. you’re established), then you can apply for the whole gamut of ordinary mortgage products. Indeed, in some instances only a year’s accounts are required.
If you can’t prove your income, but can provide some receipts and invoices; then a specialist self-employed mortgage (often called self-certified) is the answer. This is a new type of deal where the lender recognises that you have no proof of income, but won’t categorise you as a bad-credit case. You won’t get the best deals, but you won’t get loan-shark rates either.
Another cause of this change is recent legislation which makes it economical for self-employed persons to start their own limited companies; so many self-employed people are now company directors. If this applies to you, don’t head for a lender specialising in bad-credit cases- there’s a raft of products available to you, including the usual fixed, discounted and flexible products, at rates not much higher than are available to ordinary employed people.
As well as the specialist lenders (IGroup, Future Mortgages), the larger lenders (Halifax, RBS and especially Bristol & West) have started offering not just one self-employed mortgage, but a selection, so these days there’s no need to feel like a vegetarian in a steak house.
