Self-employed – Raising capital

It has always been more difficult for self-employed people to get a mortgage compared to salaried employees. For that matter, second charge loans have historically been somewhat harder to obtain for the self-employed as well.

At the heart of the issue is a tendency among self-employed individuals to not be able to satisfy loan officers looking to placate their own fears that the borrower will not be able to make good on his or her loan. The good news is that things are changing – at least where second charge loans are concerned.

A recently conducted survey among self-employed borrowers to gauge their view on second charge lending shows the following. 80% of respondents confirmed that second charge loans are now competitive enough to make them worthwhile; 20% disagreed.

The survey tells us something important. It tells us that consumer perceptions of second charge loans are improving among self-employed people. That’s no accident. If perceptions are improving, it’s because people looking to borrow are getting better products, better rates, and better service. It is an indication that the second charge market is responding positively to the needs of the self-employed.

Changing the way business is conducted

Lenders are changing the way they do business in order to better serve self-employed applicants. For example, one specialist lender indicated that it had reduced its tax calculation requirements while others are changing their income criteria to make it easier for borrowers to document their income.

Second charge lenders can do a lot more to help the self-employed than primary mortgage lenders because they have more flexibility. They are finally taking advantage of that flexibility to find ways to better serve self-employed borrowers. Even more encouraging is the fact that lenders are coming up with specialised products to account for the wide variety of self-employed workers and their circumstances.

Choosing a loan

This is no easy task as there are so many different options open to the majority of applicants. Be sure you know how much you feel comfortable in repaying each month and seek professional independent advice as to the best loan to suit your needs. We have fully qualified advisers waiting who can assist you so please do get in contact.