75% of self employed people in the UK are fearful about getting a self employed mortgage. They fear being declined.
“It’s because of my employment status,” they say. “It’s discrimination,” they go on to add.
A recent survey backs up these claims, by showing us that, out of 2000 self employed people, 1,421 of them believed working for themselves was a negative when applying for a mortgage.
It isn’t all doom and gloom though. Actually, the self employment mortgage scene is improving, and according to experts there are many “myths” out there holding people back.
Myth 1 – Getting a self employed mortgage is almost impossible
Firstly, understand that a “self employed mortgage” is not a real thing. It doesn’t really exist. Just like the Loch Ness monster and Big Foot.
All lenders will look at applications on a case by case basis, regardless of your employment status.
Best of all, over the last 12 months many lenders are becoming more flexible about taking on customers who are self employed.
Myth 2 – You need at least 2 years of accounts to be accepted
If you are going to be accepted for a mortgage when self employed, then obviously you need to show proof of income in the form of accounts.
Up until now you needed to show at least 24 months of accounts, but many lenders are becoming more lenient
For example, out of 76 lenders who were recently surveyed, 14 of them said they accept a self employed applicant with only 1 years worth of accounts.
Myth 3 – You will have to put down a deposit of 10%
The general rule of thumb has mostly been…employed applicants need a 5% deposit while self employed applicants need a 10% deposit
Not fair? Well, get ready to say…”Not Anymore!”
That’s right. Many mortgage lenders are now levelling up the playing field and only asking for 5% from a self employed mortgage applicant.
Myth 4 – We sell umbrellas
While this isn’t strictly to do with self employed mortgages…there does seem to be a myth that we are a website dedicated to selling umbrellas.
Some people even seem to think we sell umbrellas as a side business, while others have the bizarre notion that we manufacture umbrellas and then sell to the trade.
It is TRUE that at one point we did consider selling umbrella and patio sets and beach umbrellas to take advantage of the peak umbrella buying season…but talks at a very high level within the company fell through and it has now been scrapped.
So…for the last time…We DO NOT sell umbrellas!!