Getting a mortgage isn’t always easy. If you’re self-employed or work irregular hours, it can be hard to find deals, here’s why a specialist broker can help.
You’d be forgiven for thinking that applying for a mortgage is simpler than ever. Adverts would suggest that you just go online, pop your details onto a form and then receive a list of suitable mortgage deals for you.
The reality is often very different though. For a start unless you are making an enquiry with a whole-of-market mortgage provider there is no guarantee that you will even be choosing from all the best mortgage products that are out there. If you’re searching yourself, some mortgage deals are broker-only products that are only available if you apply for the mortgage through a broker.
The process is complicated even more if there is anything the slightest bit ‘non-standard’ about your circumstances. From your employment status or contract, to the type of property you are buying, there are a multitude of factors that mean that you’d benefit from the expertise of a specialist mortgage broker to find you the most favourable deal.
So, what are the circumstances that could make your search for a suitable mortgage less than plain sailing?
Self-employed or non-standard employment status
When a lender assesses your mortgage application, they want to see how much you earn and how stable your income is, to asses affordability. If you’re self-employed or a company director this can often prove a problem.
Employees have access to payslips and contracts to verify how much they earn and show how little their income fluctuates over time. The UK government definition of self-employment covers what most people would consider the difference between employed and self-employed to be. However, from a mortgage lender perspective, even if you work for a limited company that you are the majority owner of, or draw substantial income from dividends, it may be more difficult to show what your stable income really is.
If you’re a freelancer or work as contractor you might struggle to demonstrate convincingly to a lender that your income won’t drop in the future, leaving you unable to repay your mortgage.
A specialist mortgage adviser will be able to tell you what proof of income different lenders will accept, such as the number of years accounts required or an SA302 from HMRC, as well as having information on how lenders will approach the less uniform income of freelancers. They’ll even know which lenders will consider counting retained profits towards the income of company directors.
Irregular working hours and income
The self-employed aren’t the only people who have irregular working hours and income. Healthcare professionals such as doctors and nurses, as well as police officers, are among those whose income is often made up to a greater or lesser extent with overtime or out of hours payments.
This means that it can be difficult to show lenders a consistent level of income over a long period. As lenders use income to calculate mortgage loan amounts, as well as to assess whether applicants will be able to afford repayments, this may prove a barrier to finding a suitable mortgage.
As well as irregular hours many people working within healthcare, and indeed in education, work on short-term or supply contracts, or contracts that can even appear like self-employment to lenders. These again make it tricky to prove that you have a suitable long-term income to service a mortgage.
Unusual property types
Lots of high-street lenders are unwilling to consider giving a mortgage to buyers who want to buy a property that’s a little ‘out of the ordinary’. Examples of unusual properties include timber-framed properties, thatched homes or listed buildings, as well as prefabs or buildings made predominately of concrete.
There are a number of reasons why lenders may be cautious about lending to buyers of these types of properties. One consideration is the possible resale value of the property should the lender have to take possession of it. If a property is particularly quirky it may be difficult to sell on.
On the other hand, lenders may have concerns about whether you will be overstretched financially, and so unable to repay your mortgage, if you take on a property with high ongoing costs. This is particularly true of thatched homes which can require quite expensive work to keep the thatched roof maintained.
Japanese Knotweed and previous property issues
The presence of Japanese knotweed on or near a property is something else that can ring alarm bells for a mortgage lender. Japanese knotweed is a highly invasive fast growing plant that can compromise the structure of buildings.
Lenders will use the property survey to assess what the risk to the property is, but not all lenders will treat the risk in the same way. A specialist mortgage broker will have access to the latest criteria that lenders are using, making it easier for them to send your application to the lender who is likely to be most sympathetic towards it.
This is true of many other problems that can crop up with properties; e.g. mortgage companies and insurers have different views and criteria for subsidence and underpinning.
A specialist mortgage broker isn’t just for special cases
Whatever your circumstances, and however straightforward you think your house purchase and mortgage application will be, any house buyer can benefit from the skills of an independent specialist mortgage adviser.
Whether you are after a first-time buyer mortgage, a remortgage or a buy-to-let mortgage, a whole of market, independent specialist mortgage broker like Simply Lending Solutions can use their experience of finding mortgages for some of the most challenging applicants to find the most competitive mortgage for anyone.