Self employed mortgages after governement changes

stevesmithanon

I understand that the government as improved things somewhat for mortgage market, providing cheaper money to mortgage lends and new rules to help with deposits.

My question is directed to mortgages for the self employed.

1. Are lenders now relaxing criteria for the self employed? e.g. for income multiples, what constitutes proof of earnings etc.

2. Are the rules for deposits applicable for the self employed too? Was it just for new builds or something?

Thanks,

Steve

ACG

What is it your trying to do?
Criteria is very slowly relaxing but its more rates at the lower LTV's which are showing the most improvement.

Self employed mortgages are easy enough to get, but you do have to show income (unlike in the old self cert days). Generally speaking you may have to show 1-3 years accounts and/or SA302's (self assessments). But if you explain what your after we can tell you if its possible or not.

Moonraker71

I'm currently applying for a 60% LTV mortgage with NatWest. I've had to provide proof of deposit and SA302s for the last two years. Income multiple is about x 5 with them, I think.

_Andy_

stevesmithanon wrote: »

I understand that the government as improved things somewhat for mortgage market, providing cheaper money to mortgage lends and new rules to help with deposits.

My question is directed to mortgages for the self employed.

1. Are lenders now relaxing criteria for the self employed? e.g. for income multiples, what constitutes proof of earnings etc.

2. Are the rules for deposits applicable for the self employed too? Was it just for new builds or something?

Thanks,

Steve

What is your own specific situation?
How much deposit do you actually have and what is it you're trying to achieve?

stevesmithanon

I'm looking at perhaps buying a property for £200K to £250K. Maybe 4 x income, but only the last years income as my income has been rising at a fairly steady pace so 2 years ago my income would have been half what it is now.

I have about £40K saved to put down as a deposit so far, but that may rise as time goes on.

I have no debts.

ACG

Very few lenders will do it on just one years accounts (especially at that LTV). You might be able to get a lender to average the last 2 years or even accept just the most recent years accounts but if your looking for something like that, then your probably going to need the help of a broker.

stevesmithanon

I will probably have a 25% deposit when I buy. So given that, a 4x salary will still be tricky even if you can show pretty steady income?

kingstreet

Lenders tend to average your income over the last three years, but there are lenders who will lend 5x your net profit, less the cost of any personal credit commitments, childcare etc.

I'd talk to a broker about this to see how best to approach the situation. Your deposit and credit score may trigger a requirement for one year's accounts only, depending on chosen lender.

Thrugelmir

stevesmithanon wrote: »

My question is directed to mortgages for the self employed.

1. Are lenders now relaxing criteria for the self employed? e.g. for income multiples, what constitutes proof of earnings etc.

2. Are the rules for deposits applicable for the self employed too? Was it just for new builds or something?

There's no relaxation of criteria in the sense that the mortgage still has to be affordable. The additional loan element still has to be repaid at some point in the future. In terms of new builds developers have to contribute to an indemnity fund as well. So it's all parties interests to make the schemes work well.