Henry Brown & Co Chartered Accountants
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Loan woe for the self-employed

17-01-2021

Some banks are refusing to provide mortgages to self-employed workers if they took coronavirus support loans or income grants, despite the Government and the banking watchdog saying the payments would not affect credit ratings. Robert Sinclair, chief executive of the Association of Mortgage Intermediaries, said banks are referring applications from the self-employed to their manual underwriters automatically, meaning fewer self-employed people are being granted a mortgage. The Financial Conduct Authority has said making use of one of the financial support schemes should not prevent self-employed people from accessing credit. Meanwhile, analysis shows that Santander is limiting its mortgage products to 60% loan-to-value for the self-employed, while NatWest will ignore debts being cleared for employed borrowers when assessing affordability on a mortgage application but will still factor them in for the self-employed. TSB limit s new self-employed borrowers to mortgages with a maximum LTV of 75%, Halifax has placed limits on how much the self-employed can borrow, Metro Bank requires more bank statements from the self-employed than other applicants and Nationwide is limiting its 90% mortgage products to salaried employees only.

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