The way people work is changing – and the traditional distinction between employed and self-employed borrowers does not always reflect the increasingly varied ways in which people earn their income.
From limited company directors and business owners to contractors and people with multiple income streams, self-employment can take many forms. For brokers and lenders, that makes understanding the individual circumstances behind an application increasingly important.
Self-employed borrowers are not necessarily more complex than employed applicants, but their income can require a different approach. Accounts alone may not always tell the full story: a business could be growing, income may fluctuate from one year to the next, or recent performance may have been influenced by circumstances that require additional context.
For brokers, this places greater emphasis on understanding how a client’s business operates, how their income is generated and the story behind the figures. It also highlights the importance of strong broker-lender relationships and access to experienced underwriting when a case does not fit neatly within standard criteria.
In the third episode of Newcastle Building Society’s Powered by Partnership podcast, Francesco Di Pietro is joined by George Yerou, Head of Mortgage Sales at Freelancer Financials, and Matt Coulson, Founder and Managing Director at Heron Financial, to explore self-employed mortgage lending and the changing world of work.
Together, they discuss the realities of assessing different types of self-employed income, the importance of looking beyond the numbers and the respective roles of technology, underwriting expertise and human judgement in helping brokers place cases. They also explore how developing expertise, building relationships and creating a strong network of introducers can help brokers grow their presence in the self-employed market.
Watch the full discussion below.
If you’ve missed any of the previous episodes you can access them via the links below
Episode 1: First-time buyers you can view it here
Episode 2: Affordability you can view it here
Episode 4 of the Powered by Partnership Podcast series will be published next week on the 13th October
