There are many ways to be special, but when it comes to buying a home, being special may be more common than you think.
For many in business, this means special or unusual employment and financial circumstances. You might work irregular hours, you might be self-employed, or you might be keen to buy a home that is unusual, such as a self-build. These are often enough for most lenders to reject mortgage applications.
We spoke to a leading specialist mortgage broker in Chelmsford about how to be special and get a mortgage to buy your dream home.
Why are you special?
When mortgage lenders assess your mortgage application, they take a number of financial, employment and personal factors, plus details about the property, into account. One of the most important is affordability, i.e. how likely you are to meet your mortgage repayments.
The main area lenders will look at is how much you earn. If you are employed in a salaried job, with full time hours, it is relatively easy for them to understand how much money you have coming in each month. However, if you’re a company owner, have a job with irregular hours or tend to work on a supply or contract basis, it can be harder to prove a regular income. The same applies if you have a job that is heavily reliant on overtime payments.
You may also have difficulty proving your income if you are self-employed or work as a freelancer, as again your income will fluctuate and isn’t guaranteed.
Many lenders are reluctant to lend to you if you intend to buy an unusual property; e.g. a prefabricated or self-build home, or a thatched or listed building. This could be because they are concerned about valuing your home or if they needed to repossess and sell the property. They also may factor in higher maintenance costs for unusual properties, for example re-roofing a thatched cottage.
What are your options?
If you are self-employed there are some measures you can take that will dramatically improve your chances of finding a mortgage. You can make sure that your company accounts or self-employed finances are right and up to date, plus get them signed off by an accountant.
Realistically, you need to ensure that any ‘tax efficient’ processes don’t make it look like your income is too low to afford mortgage repayments on the property you want to buy.
Many of the best deals and specialist lenders are only available to mortgage brokers. This means that it’s worth getting specialist advice. While it’s tempting to try and do it yourself, you may get rejected by high street lenders, and local mortgage brokers may only have access to a limited panel of lenders.
What difference does a specialist mortgage broker make?
Specialist ‘whole of market’ mortgage brokers have access to all lenders and mortgage deals, as they aren’t tied to specific banks or building societies. They often have access to ‘broker-only’ deals that you won’t ever find yourself.
Specialist brokers know the criteria from each of their lenders, and how these criteria change over time. This up to date information makes them uniquely positioned for anyone with special circumstances, as they’re able to assess your criteria and find the best mortgage for you.
As an example, most lenders require self-employed mortgage applicants to supply 3 full years of accounts, but some lenders will accept 2, and there are others that will work on 1 years accounts if certain other criteria are met.
This market knowledge is what sets specialist mortgage brokers apart, it can make all the difference and ensure your mortgage application on your dream home is accepted.
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