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Mortgage lenders ‘inflexible’

Brokers have called on the Government to intervene as an increasing amount of self-employed borrowers are turning to secured loans instead of remortgaging because of the tougher requirements posed by mortgage lenders.

They claim the self-employed are being forced to resort to other lines of credit as lenders’ requirements are too inflexible.

Email Mortgages chief executive Michael White says: “There are a huge number of people who fall into the category of recently self-employed and they fast become an underclass of borrower if they are denied standard mortgages because they are deemed too high risk.

“Secured lenders just seem prepared to take a more risk-pricing view of the market. These people may end up with unsecured lenders. That can’t be good. This is where the Government might come in.”

Emba group sales and marketing director Mike Fitzgerald says: “There should be a lot more help for self-employed people. The Government should put pressure on the lenders to do more in this area.”


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There are 3 comments at the moment, we would love to hear your opinion too.

  1. Its the FSA and its stringent regulations causing this and many mortgage related financing issues. We need to have prudent self certification back, lending on HMO’s as even 3 Bed houses are classed as such.. Lending to Foreigners as they have high deposits and bring funds into the UK economy.
    Many other issues need to be looked at if the
    housing market has to move to help the wider economy.

  2. Sandra McWhirter 11th June 2010 at 8:39 pm

    To anonymous-hold on a minute, lenders have been told by the whole country they should have more stringent regulations and now when they do everyone complains!
    Self cert is why the country is in this mess! Can’t get a mortgage-just bump up the income and self cert! I am an underwriter and had the sense to request references for self cert and 99% of the time income was inflated (one had an income of £12k but stated £45k)
    Don’t pay a mortgage-its ok just self cert at unlimited products!
    I agree things need to be looked at but we would be mad to reintroduce self cert!

  3. It seems to me that we have gone from one extreme to another. There was and still is a need for “self cert” for the self employed. Everyone knows that the majority of self employed pay accountants to reduce their net profits and tax liability. Most of the self employed that I see, will be claiming for fuel, use of part of the home, etc as a business expense. If the LTV is set correctly and as long as the client is made fully aware of the implications of non payment and the effect of rates on affordability, who is at risk? In a rural environment a large majority of the workforce are self employed who can obviously afford much more than their accounts would suggest.

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