MSE News: Mortgage blow for the recently self-employed

Former_MSE_Guy

This is the discussion thread for the following MSE News Story:

"Only when they have been trading for at least two years will they be able to get a home loan, under FSA plans ..."

Read the full story:
Mortgage blow for the recently self-employed

thamespirate

ok so who loses here , i just started self employment so , i will not be giving any businness to the lenders , so when the banks ect start crying that they do not have enough customers / borrowers tuff on them.

ninky_2

as far as i know self cert mortgages haven't been around for a while know and most lenders require 3 years of accounts. not much difference in practice but i guess it stops things from sliding back to how they were.

two years of self employed income would seem to be sensible to me. why would you lend to anyone on what they expect to earn from a new business?

Cannon_Fodder

http://news.bbc.co.uk/1/hi/business/10606475.stm

"It also found a similar proportion of new mortgages between 2007 and the first three months of 2010 were agreed without the customer having to verify their income."

ninky_2

i know a significant number of self employed who got on the ladder by using btl deals (even though they actually lived in the property). clearly this is fraudulent on some level but i wonder if this will drive more to do so?

dunstonh

This is basically a return to how it was 15 years ago. What you found then is that many self employed ended up getting business mortgages i.e. signed off by the business banking arm based on a different lending criteria than an employed person being dealt with by the personal banking arm.

maninthestreet

thamespirate wrote: »

ok so who loses here , i just started self employment so , i will not be giving any businness to the lenders , so when the banks ect start crying that they do not have enough customers / borrowers tuff on them.

So in 2+ years time, if you need to mortage/re-mortgage, who will you approach for the money?

bylromarha

Self employed have always found it difficult to get a mortgage or lumped with higher rates.

OH had been SE 12 months when we bought our first house in 2001. The mortgage had to solely be in my name as he doesn't use an accountant to do his books, so he wasn't allowed to be included. Remortgaging to a better deal a few year on, his wage overtook mine, but still we got a worse deal than if his pay was from an employer. Certified accounts are the only ones they like to see, so it looks like we now need to pay an accountant to do what OH can do, just for the mortgage. Crazy.

[Deleted User]

What's ridiculous about this is that there are many self-employed people who are in secure self-employment who can't get a mortgage, whereas the due diligence process for employees asking for a mortgage is so flimsy that they may be at greater risk of being out of work than the self-employed!

ninky_2

Deleted_User wrote: »

What's ridiculous about this is that there are many self-employed people who are in secure self-employment who can't get a mortgage, whereas the due diligence process for employees asking for a mortgage is so flimsy that they may be at greater risk of being out of work than the self-employed!

that's true. is there a time limit for how long you have to have been in employment to get a mortgage?

VT82

thamespirate wrote: »

ok so who loses here , i just started self employment so , i will not be giving any businness to the lenders , so when the banks ect start crying that they do not have enough customers / borrowers tuff on them.

And the last time banks started crying that they didn't have enough people wanting to borrow money was when exactly???