{"id":6029451,"date":"2020-02-14T13:15:52","date_gmt":"2020-02-14T13:15:52","guid":{"rendered":"https:\/\/www.buyassociation.co.uk\/?p=6029451"},"modified":"2020-02-14T13:15:52","modified_gmt":"2020-02-14T13:15:52","slug":"revealed-self-employed-buy-to-let-mortgages-now-easier-to-secure","status":"publish","type":"post","link":"https:\/\/www.buyassociationgroup.com\/en-us\/news\/revealed-self-employed-buy-to-let-mortgages-now-easier-to-secure\/","title":{"rendered":"Revealed: Self-employed buy-to-let mortgages now easier to secure"},"content":{"rendered":"

New research from Trussle has revealed that it\u2019s potentially easier for the self-employed to become landlords with a buy-to-let (BTL) mortgage, than buy a house of their own. <\/strong><\/p>\n

The online mortgage broker has identified an access gap where the self-employed<\/a> struggle more than those in “traditional” employment to get residential mortgage applications approved by lenders.<\/p>\n

When it comes to buying their own home, Trussle found that self-employed customers represent 23% of all “specialist cases”. <\/strong>Nearly one in seven (14%) self-employed borrowers are less likely to get their mortgage approved than any other \u2018under-served\u2019 group. In fact, approval rates for retirees (86%) and those with bad credit<\/a> (89%) eclipse those for the self-employed (76%).<\/p>\n

Why is it so hard to get a residential mortgage?<\/h4>\n

One of the biggest issues is that there is no standardisation between lenders when it comes to self-employed application criteria; then there is the degree to which their employment history is scrutinised.<\/p>\n

The self-employed must prove up to three years of work, while their permanently employed counterparts need only provide their job contract. This means those in self-employment for less than this period could be rejected outright.<\/p>\n

Passing the mortgage affordability<\/a> assessments is also a more complicated process. Self-employed applications require the average of the last two years\u2019 income, compared to the previous three months of income for permanently employed applicants – as well as financial commitments and outgoings.<\/p>\n

Unsurprisingly, according to Trussle, nearly half of self-employed people (44%) believe the mortgage system is unfair.<\/p>\n

Is buy-to-let really an option?<\/h4>\n

While lenders still require self-employed borrowers to jump through hoops to secure a residential mortgage, the criteria for approving buy-to-let mortgages<\/a> has been relaxed. It\u2019s now possible to apply for a buy-to-let mortgage as a self-employed person without three years\u2019 worth of accounts, which means it\u2019s easier than ever for the self-employed to invest in a rental property<\/a>.<\/p>\n

If you are self-employed and interested in a BTL mortgage, then talking to a broker<\/a> is recommended. You\u2019ll have access to the same products as everyone else and will need a deposit worth at least 25% of the property’s\u2019 value.<\/p>\n

Like with any loan application, a good credit score will help, as will financial accounts from previous tax years if you have them. If you are an inexperienced or first-time landlord<\/a>, you can increase your chances of getting a competitive deal by having three years of accounts, but certain lenders will consider you without them.<\/p>\n

Even if you don\u2019t have a high income, existing property portfolio, and three years’ accounts or more, you can improve your chances of getting accepted for a BTL mortgage by:<\/p>\n