Yes, but unfortunately, because of the various misdeeds and over zealous behaviour of both some borrowers and some lenders in the run up to the Great Credit Crunch of 2008, it is now rather more difficult for freelancers and the self employed to obtain a mortgage offer.
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Whereas, in the past, mortgagees were willing to lend significant sums of money to self employed buyers based simply on their stated income, much more detail and evidence is now required. In the past, ‘Self Certified Mortgages’ were offered based on stated incomes and were, as time moved on, regularly referred to scornfully as ‘Liar Loans’.
After the credit crunch in 2008, Self Certified Mortgages ceased and lenders were encouraged to become much more cautious when lending to anyone. The self employed in particular have suffered as a result.
The primary criteria for lending is now based upon an income multiplier, proof of income, loan to value ratios and affordability. For a freelancer to be offered a mortgage they must now be able to clearly illustrate their income and how it is generated. Unlike a self employed person who can just show P60s to show how their income is made up, a freelancer will usually need to delve deep into their accounts and prove their income. For this, it’s helpful to use your accountant and/or obtain tax return information from the HMRC. Providing proof of past taxable income, current income and personal expenditure is now a critical part of the mortgage application process.
In most cases if you are ‘self employed’ (which in broad terms is usually the case if you own more than 25% of the business) then you will probably need to prove your income by providing two or three years audited accounts. You can also apply to the HMRC for an SA302 form which will detail past income as defined by your tax returns.
Either way, it can be done. You will just need to speak to the right mortgage providers. This is where we can help you. Get in touch with us on 01628 507477.
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