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Self Employed Mortgages

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How do I get a self-employed mortgage?

A self-employed individual looking for a mortgage has access to the same mortgages as employed individuals. However, they need to pass an affordability test from the lender as would any other borrower.

Since there is no employee to recommend them, self-employed individuals usually need to provide more evidence to show their financial capabilities than other borrowers. Mortgage providers can have very tight lending criteria. You need to convince them beyond doubt that you are perfectly capable of meeting your monthly repayments without fail.

Self-employed mortgages are not necessarily more expensive than standard mortgages. The only difference is the strict guidelines lenders follow when dealing with self-employed individuals during the application and decision process.

What is a self-employed mortgage?

The credit crunch made it harder for freelancers, self-employed and contract workers to get access to mortgage facilities from most lenders. As a self-employed individual, it can be hard to get a mortgage as you are required to prove that your source of income is reliable. However, it is by no means impossible and more and more lenders are willing to lend to such circumstances. If you are a self-employed individual looking for a mortgage to buy a home, some lenders offer specific self-employed mortgages.

There are numerous ways self-employed individuals can prove to lenders that they are capable of paying their mortgage. You only need to jump through a few hoops to secure your mortgage. Lenders view you as self-employed if you own at least 20% of a business that provides your income. This can be a sole trader, a contractor or a company director.

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What do I need to provide when applying?

FAQs

What do I need to provide when applying for a self-employed mortgage?

The requirements can vary from one lender to the other. Most lenders will also require that you provide accounts prepared by a chartered accountant to be sure of your reliability. They mostly focus on your average profit over the last few years. Having a good credit score can go a long way in making it easier for you to get a mortgage approval.


What is the difference between capital and interest only?

Capital repayment means you pay both the capital and interest back to a lender, where an interest only mortgage means you only pay back the interest and the amount borrowed is left to pay in full at the end of the term. There are various uses for an interest only facility and can be beneficial in certain situations however for a standard residential mortgage it is usually recommended that the capital repayment option is taken as long as it fits within an applicant’s budget and/or circumstances.


Should I consider my credit score?

A credit score is statistical data that determines your credit position. There are 3 more commonly known credit referencing agencies; Experian, Equifax and Call Credit, all of whom report data to give you an overall score. There are various factors that can impact your score these include; missed payments or defaults on your finances, not being on the electoral register, too many searches being carried out on your file within a short period – all of which can have a negative impact on your score. Being on the electoral register, keeping up to date with your payments and not being over indebted (being too reliant on credit) can improve your score as well as other factors. As well as lenders using credit scoring from these credit referencing agencies, they also conduct their own personal internal score on you as a client to make a decision on whether to lend money or not.


What is 'affordability'?

This again is a generic term used in the mortgage industry to simply state whether something is affordable or not. I.e. based on the information provided, is it reasonable to assume you can afford to keep up with the repayment. Again, various factors come in to play when assessing the overall affordability as mentioned above in ‘what is an income multiple’ & ‘what is a mortgage term’.

DNA Financial Solutions Privacy Notice

Why should you read this document?

During the course of dealing with us, we will ask you to provide us with detailed personal information relating to your existing circumstances, your financial situation and, in some cases, your health and family health history (Your Personal Data). This document is important as it allows us to explain to you what we will need to do with Your Personal Data, and the various rights you have in relation to Your Personal Data. The Data Protection Officer for DNA Financial Solutions is Drew Turner. We are registered with the Information Commissioners Office (ZA239120)

What do we mean by “Your Personal Data”?

Your Personal Data means any information that describes or relates to your personal circumstances. Your Personal Data may identify you directly, for example your name, address, date of birth, national insurance number. Your Personal Data may also identify you indirectly, for example, your employment situation, your physical and mental health history, or any other information that could be associated with your cultural or social identity. In the context of providing you with assistance in relation to your Mortgage and Protection requirements Your Personal Data may include:

The basis upon which our firm will deal with Your Personal Data

When we speak with you about your mortgage requirements, we do so on the basis that both parties are entering a contract for the supply of services. In order to perform that contract, and to arrange the products you require, we have the right to use Your Personal Data for the purposes detailed below. Alternatively, either in the course of initial discussions with you or when the contract between us has come to an end for whatever reason, we have the right to use Your Personal Data provided it is in our legitimate business interest to do so and your rights are not affected. For example, we may need to respond to requests from mortgage lenders, insurance providers and our Compliance Service Provider relating to the advice we have given to you, or to make contact with you to seek feedback on the service you received. On occasion, we will use Your Personal Data for contractual responsibilities we may owe our regulator, The Financial Conduct Authority, or for wider compliance with any legal or regulatory obligation to which we might be subject. In such circumstances, we would be processing Your Personal Data in order to meet a legal, compliance or other regulatory obligation to which we are subject.

How do we collect Your Personal Data?

We will collect and record Your Personal Data from a variety of sources, but mainly directly from you. You will usually provide information during the course of our initial meetings or conversations with you to establish your circumstances and needs and preferences in relation to mortgages You will provide information to us verbally and in writing, including email. We may also obtain some information from third parties, for example, credit checks, information from your employer, and searches of information in the public domain such as the voters roll. If we use technology solutions to assist in the collection of Your Personal Data for example software that is able to verify your credit status. We will only do this if we have consent from you for us or our nominated processor to access your information in this manner. With regards to electronic ID checks we would not require your consent but will inform you of how such software operates and the purpose for which it is used.

What happens to Your Personal Data when it is disclosed to us?

In the course of handling Your Personal Data, we will:

Sharing Your Personal Data

From time to time Your Personal Data will be shared with:

In each case, Your Personal Data will only be shared for the purposes set out in this Customer Privacy Notice, i.e. to progress your mortgage enquiry and to provide you with our professional services. Please note that this sharing of Your Personal Data does not entitle such third parties to send you marketing or promotional messages: it is shared to ensure we can adequately fulfil our responsibilities to you, and as otherwise set out in this Customer Privacy Notice. We do not envisage that the performance by us of our service will involve Your Personal Data being transferred outside of the European Economic Area.

Security and retention of Your Personal Data

Your privacy is important to us and we will keep Your Personal Data secure in accordance with our legal responsibilities. We will take reasonable steps to safeguard Your Personal Data against it being accessed unlawfully or maliciously by a third party. We also expect you to take reasonable steps to safeguard your own privacy when transferring information to us, such as not sending confidential information over unprotected email, ensuring email attachments are password protected or encrypted and only using secure methods of postage when original documentation is being sent to us. Your Personal Data will be retained by us either electronically or in paper format for a minimum of six years, or in instances whereby we have legal right to such information we will retain records indefinitely.

Your rights in relation to Your Personal Data

You have the right to request a copy of the personal information that we hold about you, its origin and any recipients of it as well as the purpose of any data processing carried out.

If you have any questions or would like to exercise your right under this Privacy Policy, please contact Drew Turner via the following methods; Email – hello@dnafs.co.uk Phone – 07943 873384 We will aim to respond to all requests within 30 days except in instances where the request may be complex. We shall let you know within the 30-day period if we will need more time but no longer than 90 days. If you have any concerns or complaints as to how we have handled Your Personal Data you may lodge a complaint with the UK's data protection regulator, the ICO, who can be contacted through their website at https://ico.org.uk/global/contact-us/ or by writing to Information Commissioner's Office, Wycliffe House, Water Lane, Wilmslow, Cheshire, SK9 5AF.