Mortgage lender updates its policies to help self-employed applicants
Yorkshire Building Society has cut the number of years’ evidence it requires from mortgage applicants who are self-employed from three to two.
It is also encouraging entrepreneurs with a sideline job, or “side hustle”, to review their income, as the additional money could be used to support a mortgage application.
The Society said the move is in response to the changing workforce in the UK, with recent figures showing that there are nearly five million self-employed people.
Charles Mungroo, senior product manager, said: “It was clear we had to update our policies to reflect the changing employment trends and differing types of borrowers.
“Moving from three to two years’ evidence means we’re now able to support a much broader range of customers including those that are in the early years of their new ventures along with those who have additional income coming from a self-employed source.”
Here are the Yorkshire Building Society’s tips to help self-employed workers get a mortgage:
1. Keeping your finances tidy and working out profit accurately is really important. With various taxes, expenses, bills, invoices, dividends and much more, it may help to talk to an accountant. It is also important they understand that you intend to apply for a mortgage.
2. You may need some guidance on your mortgage, for a home purchase or if you are thinking about switching. A bank or building society’s mortgage adviser can outline the options through that specific lender, while a mortgage broker will provide a wider market view.
3. The type of your self-employment may mean a different assessment of income. Whether you are a director, a sole trader, a contractor or in a partnership, understanding how lenders calculate your income can improve the chances of a successful application.