13 Feb Self-Employed Mortgages
Buying a house can be hard work, whether you’re a first time buyer or an experienced home buyer, the processes can feel long winded and frustrating. As the leading independent estate agent in Colnbrook and the surrounding areas we speak to a vast number of people about their experiences buying and selling, and without exception the mortgage process comes up as one of the most stressful aspects of the house move (aside from the physical moving).
In our area we have properties to accommodate everyone, from detached family homes to first time buyer flats, this means we speak to people from all backgrounds and circumstances. From our experience we have found that self-employed people have one of the toughest times when it comes to getting their mortgage applications approved.
Bad credit is better
Did you know that according to recent research, just 76% of self-employed mortgage applications are approved compared to 89% of those with bad credit? The mortgage lending industry and the new affordability rules have led to many people either being trapped on an existing variable rate, unable to get approved for a fixed rate product which would reduce their outgoings.
Affordability rules were brought in to avoid another financial crash like the one we saw in 2008, but in doing so we are seeing people who could comfortably afford the repayments turned down.
New Mortgage Products
The self-employed demographic is a large portion of the UK workforce, with around 5 million people identifying as sole traders or freelancers and accounting for around 15% of the working population. While the affordability set by lenders has been quite stringent for the last decade, we are starting to see the emergence of new mortgage products designed to bring some flexibility to the market.
We are seeing products such as the ‘Family Springboard Mortgage’ and the ‘Family Boost Mortgage’ aimed at first time buyers as well as things like the governments Help to Buy Scheme and Stamp Duty Relief which have been developed specifically to get people onto the property ladder.
With the self-employed market being so large in the UK we are sure to see an increase in the range of mortgage products developed with this segment of the market in mind. At the moment many lenders will only accept applications from people with two or three years’ worth of accounts, one of the biggest challenges facing the self-employed is only having one years’ full books available.
A Competitive market
The mortgage industry is very competitive, and it is this competition along with the Bank of England base rate that is keeping mortgage rates low. 2019 saw some of the highest numbers of First Time Buyer since 2008 and we are increasingly seeing lenders targeting specific markets in order to win the business, so it is likely that there will be a wider selection of self-employed mortgages products in the not too distant future.
If you would like to speak to someone about your mortgage, we would be happy to introduce you to a mortgage adviser who can help.
But one thing we recommend when looking for your mortgage, whatever your circumstances, make sure that you do your research. There are hundreds of sites available, they will help you get a better understanding of the market and what you might be able to achieve. Make sure you check out sites such as Money Super Market, Money Saving Expert and Compare the Market.
Get in Touch
Remember, as the leading independent estate agents in Colnbrook and the surrounding areas we are location experts and are always happy to talk you through your property options. You can contact us on 01753 683000 or email us. You can also follow us on Facebook, LinkedIn and Instagram.