It has become apparent that mortgage companies are now being very sensitive when making decisions on lending money – particularly for the self-employed (including small companies).
From our experience of clients applying for a mortgage recently, we have noticed the following changes:
- More detailed proof of income is required i.e. where they might have just asked for the last set of company accounts, lenders now ask for personal tax calculations, 3 months business bank statements, accountants certificates AND the previous set of company accounts
- Extra details required in an accountant’s certificate i.e. specific references to covid-19 and future impacts on the business
- Specific questions in the application process about whether the business has taken advantage of any of the government grant schemes for coronavirus i.e. furloughing staff, self-employed income support scheme. If the applicant ticks yes, the mortgage offer is often rejected and needs to be referred for approval “higher up” in the organisation.
All of the above delays the mortgage offer process which can cause issues – so do make sure you are well prepared if you are in need of a new or renewed mortgage in due course.
Obviously this varies from lender to lender and with everyone’s unique circumstances, so now, more than ever, it seems to be important to have both an accountant and a mortgage advisor on board when applying for a mortgage.