A cold shoulder for self employed mortgages?

 

At Charther CT we come across many self employed contractors and freelancers who feel cold shouldered by traditional mortgage lenders. Over 50% of people who are self employed feel that they may never be able to even get a mortgage!

Before the recent credit crunch, potential borrowers had the option of a self-cert mortgage, where there was little requirement for proof of earnings. This was a boon for the self employed whose income tended to fluctuate.

Unfortunately for the self employed, self-cert mortgages are no longer on offer, making it increasingly difficult for the self employed to get a mortgage. It is not a lost cause, and with due diligence, people who are self employed can greatly help themselves to obtaining a mortgage.

Steps to a self employed mortgage

  • Keep an eye on your credit rating and try to avoid any arrears, non-payments, ccj’s etc.
  • Minimise any superfluous personal costs, mortgage lenders will look at all your expenses.
  • Make sure you have a qualified accountant to sign off your accounts.
  • Try to have at least 3 years of receipts and accounts for you and your business.
  • Keep/get receipts from HMRC in regard to your accounts/earnings.

Good luck!

For further information on mortgages Council of Mortgage Lenders

Is debt holding you back?

 

According to a government survey a large percentage of adults are delaying traditional life such as marriage or a car purchase due to personal debt.

The largest group hit were people still paying off their student loans, while the amount of adults either forced back to the family home or still living with their families has also grown, the average age of the first time buyer is now 31 compared to 28 in 1995.

One of the biggest reasons debt is problematic is due to the fact that it sucks away your financial and emotional resources. When debt is hanging over you, it makes it difficult to concentrate on anything else but debt. This can sometimes lead to what is referred to as a vicious cycle of debt, when instead of going forward, it feels as if you are actually sinking.

Managing your debt without it hindering upon your life choices can be as simple as consolidating into one low interest loan, or if possible a zero interest credit card (but keep your eye on any zero interest promotional period) That way, moving forward in life can start to feel like a very real and possible reality.

Avoiding the debt bomb

In the UK alone the amount of household debt now sits at over £170 billion! Spurred on by cheap money a record number of people are being lured into splashing out on home improvements, cars, goods and services, by credit card companies and banks.

Over £41 billion is now owed on credit cards, coming from long sweetener interest free deals and credit card transfers, removing interest payments for up to 3 years.

Consumer credit on the high street is now up to £84 billion with £36 billion made up of personal loans and £7 billion in overdrafts.

New car sales are at record highs, as is the financing of new cars. Over 75% of new cars bought in the past year were financed through a loan.

With a possible rise in interest rates, many people are sitting on a ticking debt time bomb, in the past year alone Citizens Advice has dealt with nearly 300,000 cases of people struggling with debt.

If you are dealing with debt or don’t want to be caught out when interest rates go up, here are a few simple steps that can greatly help –

1 – Face your debts and make a list of everything you owe.
Remember don’t panic, there are others in the same boat, and organisations to help.

2 – Prioritise your debts into order of most importance.
Top priority debts are those that put your home at risk such as mortgage or rent, council tax etc. Low priority are credit cards, loans from friends etc.

3 – Work out a monthly or weekly budget.
Write down your income and expenses (excluding debt repayments) to work out how much you have left to pay your creditors.

4 – Speak with your creditors.
They are more likely to help if you contact them and explain your situation. Most will accept reduced payments to help you pay the debt off.

5 – Speak to professionals.
There are free organisations that are there to help you with debt advice and action, such as Citizens Advice and Step Change.