That’s the headline of a recent news article by Together Mortgages.
Research by Together Mortgages found that more than a third of self-employed people, looking to buy a home, judged themselves unworthy of a mortgage. A National study revealed that 36% of self-employed, people looking to buy a home, during the last 5 years, decided against it because they expected to be turned down.
And there could be grounds for such caution. Together’s research shows that around 21% of self-employed borrowers have been rejected at application. With a staggering 20% of these having been turned down more than four times.
The main reasons for rejection are said to have been: the lack of a recent tax return, and irregular or insufficient income. Apparently 20% of self-employed borrowers stated that they were refused a mortgage due to a lack of proof over future earnings.
Pete Ball, our personal finance CEO at Together, said: “These findings are understandable, but the fact that so many people are doing themselves out of owning their own home because they expect rejection is very worrying.
“The way people live, and work has changed enormously over the past few years, and it doesn’t make sense for the mortgage market effectively to lock out such a large group as the self-employed simply because of the way they earn a living.
“It therefore requires lenders to invest time and develop experience in understanding applicants’ circumstances in order to be able to help them. Providers have, quite rightly, to ensure that mortgages are affordable for borrowers, but that should not be done at the expense of making it harder for the self-employed. There are signs of improvement across the market, but greater flexibility is needed.”
Self-employed applicants often find getting a mortgage more challenging than those in employed positions. Mortgage Providers have different rules about what evidence is required when submitting a mortgage application for the Self Employed. So, it’s probably a good idea to seek mortgage advice.
More and more Massey Divall are finding clients in this position. However, there’s light at the end of the tunnel. Opportunities are opening all the time with specialist lenders such as Together Mortgages, who taking a more understanding view.