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Self-Employed Mortgages in 2021

Self-Employed Mortgages in 2021

It’s been well publicised that the UK’s Government response to the Global Pandemic has had its controversies, while the furlough scheme has helped many, there has been little help for a large proportion of the Self-Employed who have been forced out of work and what help there has been has not been available to all.

For many years being Self-Employed has been a disadvantage when it comes to how you are assessed for a mortgage, whereas someone in a permanent contract of employment could get a mortgage on day 1 of starting a new job, a self-employed person typically has to demonstrate earnings over a 2- or 3-year period to even be considered for a mortgage. Factor in that it is the net profit figure that you are usually assessed on and there is no doubt it is harder as a Self-Employed person to qualify for a mortgage. That said, pre-Covid when you could demonstrate the required level of earnings over a period of time, being Self-Employed became less of a disadvantage when applying for mortgages and mortgage lenders would offer the same terms to a Self-Employed person as an employed.

That has changed with Covid, not only has being Self-Employed, particularly as a sole trader, meant access to any kind of furlough scheme has been denied, those taking the Self-Employed Income Support Scheme grants, designed to help the self-employed, have since found themselves jumping through hoops to get a mortgage or denied mortgages altogether. For many Self-Employed in need of re-mortgaging to save money and go on to a better rate or continue with plans to move or improve homes once business has improved, this has been a cruel blow.

Getting a good mortgage adviser who is experienced in helping Self-Employed people get a mortgage in a post Covid world will save you a lot of time, stress and potential disappointment. Life has been disappointing enough for the past year for so many, speak to a Mortgage Adviser early, so that you don’t have to go this one alone. So how has Covid changed eligibility for a mortgage if you are Self-Employed? These are typical examples where lenders have tightened their criteria specifically for the Self-Employed.

  • It is likely that you will be assessed using lower income multiples in some cases meaning you can’t borrow as much today as you could have over a year ago.
  • You may need a bigger deposit, in some cases as much as 40% of the value of your home.
  • Previously taking the Self-Employed Income Support Scheme Grant (SEISS) may rule you out of getting a mortgage for a period of time until you can demonstrate that your earnings have returned to the levels required for the mortgage.
  • You may need to demonstrate in greater detail that your business has returned to the required level of earnings, for example by providing business bank statements.

If you have struggled financially, it is possible that you have had no choice but to borrow against loans or credit cards, this will further make life difficult for you when it comes to applying for a mortgage.

Many Self-Employed people have had to change their work altogether, some have been able to take up paid employment until life returns to normal, others have had to move away from the profession that they know and love and offer a totally different service that fits within the current restrictions.

Helping the Self-Employed to get on the property ladder has been a rewarding part of my role as Director and Mortgage Adviser here at The Money Guardian, at the moment though it has more than its fair share of challenges. That said, in some cases, we can still get good results for Self-Employed clients, the journey can take longer and be more difficult, but with the right set of circumstances and advice and our support, being self-employed does not need to be a barrier to getting a mortgage, even at the moment. We want to be here to support you if you are Self-Employed, whether you are surviving or thriving, whether it is now or in the future, to get a plan in place to help your financial position, move or improve your home and secure a mortgage when the time is right.

If you are Self-Employed and need help with getting a mortgage, please get in touch with one of our Advisers here at The Money Guardian. It is never to early to get good mortgage advice, whether it is putting a recovery plan into place to achieve that goal of moving home or improving your current home in 6 or 12 months, or longer. We are here to support you now and help you to be ready for when life returns to normal and your business can get back on track.

Melanie Eastwood is Director and Mortgage Adviser at The Money Guardian, founding the company in 2017 after a long and successful career in Financial Services. She is passionate about helping people achieving their goals when it comes to owning property or other financial aspirations. An activist at heart, Melanie tries to make a difference in her community where time allows and, in the past, has served as a local councillor, campaigning against cuts to the NHS and defending local green spaces, she has previously been a foster carer and is also the driving force behind an initiative working with local charities and school children planting trees in their town. The Money Guardian won the NatWest Hero Award in 2021 for its service to customers and the community and has featured in The Times as Vouched For Top Rated Mortgage Advisers for 3 consecutive years.


Melanie Eastwood

Melanie established The Money Guardian to offer an alternative to the overly complicated world of financial planning. As Melanie explains, “I love it when clients tell us how good they feel knowing their finances are sorted. It’s important to us that they’re able to walk through the big decisions in life feeling completely confident.”

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Mortgages for Contract Workers

Mortgages for Contract Workers

If you are a contract worker you might be feeling uncertain about how banks and building societies will view the temporary nature of your contract when it comes to getting a mortgage. You might have started making enquiries with your own bank and be confused or disappointed with the outcome. You might be at the peak of your earnings potential in a highly rewarding job but feeling out on a limb when it comes to your financial plans and owning a home or moving up the property ladder.

As if getting a mortgage isn’t daunting enough without the added uncertainty about what you tell your bank and how they will assess you for a mortgage. You might be worried that you will be looked upon less favourably than someone in a full time and permanent roll and this can sometimes be disheartening when your colleagues at work are buying property around you with their permanent contracts.

Having been a contract worker myself during my financial services career before founding The Money Guardian I understand the wrestle with pursuing your career goals as a contract worker while needing to make firm plans when it comes to buying property. Particularly as being a contract worker with looming end dates of contracts can make it difficult to meet the requirements for signing a new lease if you find yourself needing to move to a new rented house. It can be a constant stress in the back of your mind.

You will be pleased to know that getting a mortgage as a Contract Worker, with the right support and advice from a Mortgage Adviser with experience in mortgages for Contract Workers can be both achievable and stress free.

There are differences between lenders in terms of how they assess your income as a contract worker from zero hours contracts to fixed term contracts, IT contracts, professional contracts, CIS workers, contracts through umbrella companies, rolling contracts and locum professionals. The key to success is usually helped along by experience in contract work and continuous employment in the same line of work as well as the remaining term of the contract. First Time contracts are not ideal from a mortgage lender perspective though a few will consider, particularly where there is a previous continuous history of employment in the same line of work. My motto at The Money Guardian is if anyone can get you the positive outcome, we can, and our kind words from clients prove that.

Trying to navigate the differences between lenders on your own as a Contract Worker can be time consuming and at times disheartening, you might even put off moving altogether. Speaking to a Whole of Market, independent Mortgage Adviser experienced in Contract Worker Mortgages at the start of your journey, can help you to secure the best mortgage for your circumstances quicker. This can make all the difference to securing your dream home as you will be able to access mortgages offering greater levels of borrowing, with lower deposits than you might have thought possible yourself.

The key to having a successful and enjoyable career in contract work and pursuing your aspirations to buy a home, is getting great advice from a Mortgage Adviser experienced in contract work, however early in your journey you are. I find it highly rewarding to work alongside a client for as long as it takes to make their financial goals a reality and get them in the home that their hard work deserves. Contract work doesn’t have to be a barrier to owning a home, whether alone or with a growing family, it’s never too early to start speaking to a Mortgage Adviser.

Your home is at risk of repossession if you do not keep with the repayments on your mortgage.

Melanie Eastwood is Director and Mortgage Adviser at The Money Guardian, founding the company in 2017 after a long and successful career in Financial Services. She is passionate about helping people achieving their goals when it comes to owning property or other financial aspirations. An activist at heart, Melanie tries to make a difference in her community where time allows and, in the past, has served as a local councillor, campaigning against cuts to the NHS and defending local green spaces, she has previously been a foster carer and is also the driving force behind an initiative working with local charities and school children planting trees in their town. The Money Guardian won the NatWest Hero Award in 2021 for its service to customers and the community, and has featured in The Times as Vouched For Top Rated Mortgage Advisers for 3 consecutive years.


Melanie Eastwood

Melanie established The Money Guardian to offer an alternative to the overly complicated world of financial planning. As Melanie explains, “I love it when clients tell us how good they feel knowing their finances are sorted. It’s important to us that they’re able to walk through the big decisions in life feeling completely confident.”

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