Mortgage options for self employed - can I find online?

ReallyFace

Hi everybody,

My wife and I are about to take about to apply for a joint mortgage and she has a part time job while I am self employed. I have two year's worth of SA302s and working with a broker we were given two mortgage options.

What I would like to do is be able to search products online that we may be eligible based on just those two years of self employed status. Does anyone know if there's a way of doing this? Or might I have have to get lost in ts and cs in mortgage offers in the MSE Best Buy list to find out without applying?

Finally, I can considering speaking to more than one independent broker to see out the best deal. Is that a done thing? We've been down the road with one broker already so I would feel a bit bad about switching late. However as a first time buyer this is the biggest financial commitment we'll make so I want to make sure we are as thorough as possible. Without messing up our chances of acceptance of course.

Any advice folk have would be totally welcome.

Cheers!

ACG

What do you mean by:

What I would like to do is be able to search products online that we may be eligible based on just those two years of self employed status.

99% of lenders need 2 years accounts, a few need 3 years but they tend to be few and far between and some only need one years accounts/SA302s (but typically they are more specialised (expensive) lenders).

It is not the done thing to have 2 or more brokers go and do the research no - ultimately one of them is going to do work and not get paid for it. Imagine a customer coming to you asking you to spend a few hours doing work and then saying they are going to check with someone else.

ReallyFace

Cheers for this ACG,

I thought most lenders needed 3 years of accounts so good to know that with 2 years we have access to 99% of lenders. That's why I asked if there was a way of searching for products that were self employed friendly if that makes sense. So when I look at first time buyers best buy options on MSE I would like to know does my self employed status for just two years discount me from most of these products? If not all the better and I can then go back to my mortgage adviser and compare with the rates being offered.

I understand the note between shopping around for brokers. Thanks for clarifying.

kingstreet

Although lenders may accept an average of the latest two years' self-employed income (where later years is higher) there are often variations in how it will be evidenced.

Some want latest two years' Tax Calcs (or SA302s) plus Tax Year Overviews.

Others require an Accountant's certificate.

Other others want two years' accounts.

It varies from lender to lender so if you plan to research lenders yourself, you need to ensure you establish you can meet the lender's evidence requirement.

ACG

We have software which is more accurate than the online websites which we have to pay for. They are not 100% reliable.

The way we work (albeit a lot more time consuming) is to get the rates based on what is wanted and then we have a list of anything that could be a problem (2 years account could be on that list) and then we look at the lender at the top of the list and either go on to their website to check their criteria or call our account manager. If it falls out, we then move to lender 2 and 3 and so on until we get a lender it fits with.

ReallyFace

Cheers for the steer on these. I have accounts and SA302s for those two years so that's a start at least.

MattDB

Re: using a second broker - isn't a broker's job to get you the best deal - if a second broker gets you a better deal than the other they you go with them don't you?

I've been to several brokers - Although this was because several estate agents told me my offer was not likely to be accepted if I didn't speak to their broker - and one in particular wouldn't even arrange a viewing until I'd had an appointment with their broker.

However once we'd found a house we ended up going with an independent broker.

ACG

Its not really that simple Matt.
Most people I speak to initially say they want the cheapest rate. But then you start discussing fees and that changes to the cheapest deal. Then you start to discuss variable rates, 2 year fixes, 5 year fixes and even offset mortgages. Then you discuss whether they want a quick and easy lender for a few quid more or whether they are happy to wait for a few days/weeks extra in order to save a few quid.

Everyone is different and we have a conversation about what the customer wants. We then have to write a letter explaining which lenders were cheaper and why we did not go with them. Very rarely do we end up going with the absolute cheapest lender.

Realistically though, the difference between the top 2-5 lenders is usually very minimal. Going through the process of sitting with multiple brokers for an hour or so is probably not financially worth it to save 22p a month.

When you are speaking to large estate agent based brokers they typically only have maybe 10 lenders on panel so you might find there is a bigger difference but if you are speaking to normal local brokers who have 50 plus lenders to choose from you will notice less of a difference between the top few deals.

ReallyFace

It's a tricky one I guess MattDB, we have gone down the road looking at a few properties and doing sums with one independent broker who was recommended. I think they are ok but the rates offered to date aren't as god as those on online tables. However noting ACG's point where a number of factors are considered then maybe that's why the rates aren't as good as what you see advertised. The current independent broker gets paid through commission.

Another recommended broker gets paid £200 or through commission or a bit of both. I was tempted to sound them out to see what they might be able to source as a comparison. Happy to pay brokers for time spent but the long and short of it is sourcing the best deal. Up for hearing from other's experiences of this.

ACG

I know you should not have to, but have you printed off the list with the cheaper options and gone back to the broker to ask why the difference?

They should not be choosing more expensive products without a reason - that could be overall speed of the underwriting etc, but if you did not discuss that and say that was a requirement upfront then it seems strange they would use that to discount cheaper options.

It may be that you do not fit criteria/affordability, in which case it is a nice easy explanation. But there is no harm in asking. I would always rather my customers ask me why I have not chosen a product that was cheaper if they had found something cheaper rather than just go elsewhere.

ReallyFace

Hi ACG,

I haven't done that but will thanks for the advice.