Over three quarters (77%) of self-employed workers are concerned about not being able to shop around to arrange a mortgage and nearly two thirds (63%) believe that mortgage providers expect them to jump through more hoops than employed people during the application process for a new loan.
The research from Ipswich Building Society indicates that 40% of those who have (or intend to have) a mortgage in the future are worried they might have difficulty arranging finance because of their working status.
The Society's Self-employed Specialist mortgage is a new two year 75% LTV product available for purchases and remortages at a rate of, currently, 3.59% (5.4% APR), available for loans up to £350,000. The applicant must be in the same line of work as carried out for the previous three years and have accounts for a minimum of a year. Income can be verified to the 12 months accounts in the first instance or via HMRC self-assessments (SA302). The applicant's accountant must also be suitably qualified in accordance with Lending Policy.
The Self-employed Professional is a two year discount mortgage available up to 90% LTV for purchases and remortgages at a current rate of 3.99% (5.4% APR). The product is available for loans up to £500,000, and is aimed at those in a professional occupation, such as solicitors, architects, accountants, dentists, doctors, surveyors, pharmacists, vets and optometrists, and who have been working as part of an established partnership of at least three years. The Society will consider up to 90% LTV for applicants who can provide accounts for over a year but will also consider up to 75% LTV for applicants who have accounts for the period of less than one year provided they work at an established firm.
The Contractor is a new two year 90% LTV mortgage available for purchases and remortgages at a rate of, currently, 3.99% (5.4% APR) for loans up to £750,000. This excludes the Construction Industry Scheme.
All offer an application fee of £199, a completion fee of £800, unlimited overpayments and no early repayment charge.
Based in Ipswich and serving a population in the East of England and further afield through its broker relationships, the Society is aiming its support at the growing number of small businesses operating throughout the region (over 95% of total businesses, according to the New Anglia LEP).
Paul Winter, Chief Executive of Ipswich Building Society, commented:
"Too many credit-worthy borrowers with unusual circumstances are overlooked by mainstream mortgage lenders and our view is that 'mortgage misfits', including the self-employed, freelancers and contractors, should have the same level of choice and access to the mortgage market as any other group."
