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Industry must ‘appreciate’ lenders’ self-employed requirements

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  • 06/07/2015
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A majority of brokers say recent lender changes to self-employed evidence requirements have slowed down the application process, but experts say the industry should be “appreciative” of lenders’ adjustments.

A recent Mortgage Solutions poll completed by 58 respondents found that 83% of readers said changes to self-employed evidence requirements had impacted them, compared to just 17% who had noticed no change.

Last month, Santander announced it would require all self-employed applicants providing SA302s as evidence of income to also provide a tax year overview, joining a number of lenders adopting the same approach.

In an article for Mortgage Solutions, Graham Sellar, head of business development for mortgages at Santander, said a tax year overview showed lenders how much tax the applicant has paid towards the tax due on the income reported.

But AToM managing director Dale Jannels said the mortgage packager and distributor had not seen a slow-down in processing times.

“We have to appreciate that lenders are now realising how big the self-employed market is and adjusting to help accordingly. Recently we’ve seen more lenders look at retained profits, income multiples become slightly more relaxed and overall an increase in willingness to help.

“Yes there will be teething problems in accepting cases they may not have before, but in the main, if you can provide everything required at the outset and have a good understanding of the customers’ accounts, the process should be straightforward.”

Ian Scarrott, underwriting manager at TFC Homeloans, agreed with Jannels: “While the recent changes to self-employed evidence requirements from some lenders may have led to a slowdown in processing times, this has certainly not been our experience in the specialist lending sector. In fact, some specialist lenders have relaxed their stance on self-employed income requirements, opening up their products to more borrowers, but not specifically impacting on processing times.”

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