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Loughborough BS amends self-employed accounts criteria

  • 12/02/2024
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Loughborough BS amends self-employed accounts criteria
Loughborough Building Society has changed its self-employed criteria to accept one year’s accounts for sole-traders, partnerships and directors of limited companies.

The change to self-employed criteria will be available for loans up to 80 per cent loan to value (LTV) across its residential product range for purchase or remortgage on the applicant’s main residence.

It is applicable for borrowers who have previously been employed in the same line of work as their new business and for newly qualified professionals with one year’s worth of accounts.

The lender said a year two projection can be considered on referral where a business has been trading for a minimum of 18 months and the projection has been put together by a qualified accountant.

Loughborough Building Society said each case would be assessed on an individual basis.

According to Criteria Brain, the maximum age of latest company accounts for sole traders and partnerships is 12 months for around 12 lenders, and for limited companies there are 10 lenders who accept 12 months.

There is one lender in each category who accepts nine months, with the range for others going from 14 to 30 months.

Ashley Pearson (pictured), head of intermediaries at Loughborough Building Society, said: “Securing a suitable mortgage continues to prove that bit more challenging for many self-employed people across the UK, with this demographic often falling foul of one-size-fits-all mainstream lending criteria.

“For brokers with self-employed clients, it’s never been more important to understand the breadth of available options and in recognising the flexibility of certain lenders when looking to place this type of business, even for those relatively new business ventures.

“We hope this positive criteria enhancement will help open up more avenues for this vital component within the UK workforce to access the type of mortgage product they need and deserve.”

Loughborough Building Society has recently amended criteria for newly qualified professionals and people receiving benefits income.

For newly qualified professionals, it will pertain to applicants who were previously in education or vocational training, but have not yet completed six months in their role or have an employment contract that is due to start in three months.

On the benefits side, the mutual will accept between 50 and 100 per cent of benefits income, as long as it does not exceed more than half of the applicant’s total income.

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