Popular Self Employed Scenarios
Through our experience as a Mortgage Broker in Derby, we have worked with a range of self employed mortgage customers, all seeking open and honest mortgage advice in Derby.
Below is a range of scenarios that we have encountered over the years, when talking to self employed mortgage applicants.
– You are looking at getting expert self-employed mortgage advice in Derby as an owner of a company, a director, a sole trader or you are a business partner.
– The bank will only be willing to allow you to borrow so much and you are wondering if you could borrow more in order to open up more options for yourself.
– Being a self-employed business owner, your salary is an amalgamation of salary, dividends or a directors’ loan.
– Instead of paying yourself a larger salary, you leave a lot of your net profit sitting in your company.
– Even with a very good credit score, for some reason, you haven’t matched the banks’ strict lending criteria.
– Your net profit is unsteady.
– Your business has been in operation for a year.
– You are requiring the assistance of a knowledgeable Mortgage Advisor in Derby throughout the mortgage process; however, your company is in a busy period of time.
As a self-employed mortgage applicant, you may find that approaching the bank for mortgage advice is not always as beneficial. This is because banks usually process your options through an automated system.
The one drawback with this is that it doesn’t matter how many years you have been banking with them, or the amount of money you pay into your account daily, if they deny this, you won’t have another option with them.
A reputable Mortgage Broker in Derby, like ourselves, may be able to help. Our team can review your current financial state and circumstance, and find the perfect match with a lender’s criteria.
This can help you carry through a successful mortgage journey.
Self Employed Customers & Bank Mortgage Advice
It’s common for every high street mortgage lender you speak with will be granting their customers a mortgage with the help of their in-house credit scoring policies.
The mortgage lender utilise their own experience and history throughout their years in the industry to create these credit scoring policies.
For the lender to understand what type of applicant would be risky to lend to, they look over previous mortgage repayment statistics, repossession information and regular patterns.
With this policy, the lender can save time and money, however, this can stop self employed applicants in their path on their self-employed mortgage journey.
Historically, mortgage lenders have found that a high number of self-employed applicants fall into arrears compared to people who are employed.
You could argue this is due to the lack of hurdles an employed applicant has to go overcome to meet the lender strict criteria, unlike self employed applicants.
Many high street lenders out there have strict criteria also lender like you to have an increase in profits over a minimum of three years accounts, with some taking an average over three years.
You may find that some lenders will only require one years’, therefore, it’s always good to have a few years with you anyway as this can increase your chances of finding a mortgage.
Self Employed Mortgage Advice in Derby
As mentioned, the difference in lending criteria can depend on the lender. This is the case for self employed mortgages, and our team of experienced Mortgage Advisors in Derby can help you find the lender that matches your circumstances. We strive to get this right the first time!
Over the years as Mortgage Broker in Derby, we have built up experience in aiding and guiding a great deal of limited company owners, sole traders, partners that receive a salary, dividends or a mixture of the two.
Our hard-working team use their knowledge and experience to find the most suitable mortgage for your personal and financial situation.
Having Mortgage Problems?
Sometimes, we find that people get in contact with our team at Derbymoneyman as they have found it a challenge to obtain a mortgage when approaching a high street lender.
The most common reasons for this include:
– Failed banks criteria
– Fluctuating net profit
– Pay structure
– Credit score
– Personal situation
– Bank won’t lend enough
Even though it’s brilliant to scour the market for the best lender for your needs, we don’t recommend that you attempt to try lots of lenders with their strict lending criteria.
The consequence of this is that your credit score can be impacted negatively. From this, you will harm your chances of getting a mortgage altogether.