12% of self-employed rejected for first-time mortgages
Despite this, 48% of self-employed Briton earn the same or more than when they were in full-time employment
Up to 12% of self-employed borrowers have been denied access to a first-time mortgage or remortgage since they started working for themselves, according to research from Nottingham Building Society.
The findings suggest this is not down to a lower income: 48% of self-employed Brits earned about the same or more than in their previous employment, whilst 26% were earning more than they had been in full-time employments.
And it’s not only mortgage lenders who are rejecting self-employed borrowers – an estimated 14% of the UK’s self-employed had a credit card application turned down while 10% were unable to access unsecured loans.
The study also surveyed mortgage brokers, 86% said there should be more choice for the self-employed with 23% expecting applications from self-employed individuals to rise this year. 33% of brokers saw an increase in applications last year.
Ian Gibbons, senior mortgage broking manager at Nottingham Mortgage Services, said: “Self-employment is growing rapidly and being your own boss should not mean you cannot successfully apply for a mortgage.
“Lenders are responding with new mortgage deals for self-employed customers being launched regularly so there are options available and demand. The key to ensuring that you do not struggle to be accepted is to get expert independent help and to explore the full range of options.”