As a newly self-employed consultant I didn’t have sufficient evidence of income. They wanted two years’ certified accounts.
Was this a taste of my own medicine? Sort of. I’ve now experienced for myself the impact of the Mortgage Market Review (MMR) on the market – but not the impact of the rules themselves: there’s nothing in the rules that prescribes a minimum period of trading or the type of evidence of income I need.
What I, like many others have experienced is the way the rules have been interpreted by the leading players who dominate the market and adopt a one-size fits all, highly risk averse approach, calibrated with a band width aimed at avoiding the regulator rather than helping customers.
Lenders have, for many years, underwritten mortgages for self-employed customers by making an informed assessment of their circumstances, including their income, and there is no reason why this still should not be the case today.
The aim of the MMR was to ensure that lenders take informed risks – not disregard the risks altogether as happened pre-crisis. Or avoid taking any risks whatsoever, as seems to be happening today.
Step up to the plate the specialist lenders. There may be some in the FCA who frown on this, but I managed to remortgage with only three months’ track history with a lender prepared to look at my circumstances and take an informed judgement about the risks.
The policy was never to prevent the self-employed from getting a mortgage. It’s about making judgements and accepting risks – on my part just as much as the lenders. I fully understand the consequences should things not go as planned.
Special mention too of my broker. The whole end-to-end process was relatively painless and fast thanks to them. That specialist knowledge of the whole of the market and knowing who can help when you are in a non-standard position is invaluable.