Your Business and Industry
Bringing layered complexity such as self employment and age to the forefront of the conversation
We have always operated in a solutions-driven market. However, the current economic climate dictates that to better the service progressively complex borrowing needs, lenders are looking beyond a tick box criteria approach to generate a range of solutions which match these ever-shifting requirements.
For example, self-employed people, with an added complexity such as their age. There are a growing number of reasons why someone might opt to be self-employed and, according to a recent report from Rest Less, this has become an increasingly appealing option for older workers.
The report found that almost half of the self-employed workforce across the UK are over the age of 50. What’s more, the number of self-employed people aged 50 or over has increased by 18% in the last decade, a figure which was cited as being driven by the desire for flexible working and the need to work for longer as the cost of living crisis continues.
Here at Foundation Home Loans, for self-employed borrowers, we can look at using the latest year’s income and satisfactory supporting information about the sustainability of that income, which may be an accountant’s note, bank statement or other. It’s bespoke underwriting so this is where the conversations with your RAM and the underwriter directly really matter. When it comes to income we, like many lenders, are looking for sustainability and accountability. This is where an accountant can play an important role in being able to confirm their income and in submitting a reference to verify this on the borrower’s behalf. If we need to stress test the affordability boundaries, we can corroborate these levels of income with the applicant’s bank statements.
In some cases, 6x income may be available for residential applicants who sit within this professional bracket. Although, and you’ll notice a common theme here, this definition may differ from lender to lender. It can also encompass a wide range of different incomes including joint, secondary or even third incomes. At Foundation, the second applicant doesn’t need to be classed as a professional, as long as the primary applicant is and their income is sustainable.
With the specialist residential market constantly evolving, intermediary partners need to remain in close contact with BDM teams to ensure that their clients have access to the types of solutions which can make a real difference for all their property-related aspirations moving forward.
*This article was originally published on Mortgage Solutions
FOR INTERMEDIARIES ONLY
