Ipswich Building Society is rolling out new products for contractors and the self-employed as it looks to offer further support for "mortgage misfits" overlooked by the big banks.
It has published research showing that 77% of self-employed workers are concerned about being able to shop around to arrange a mortgage.
And 63% believe that mortgage providers expect them to jump through more hoops than employed people during the application process for a new loan.
Yet at the same time, self-employment in the UK is at its highest level since records began.
In line with its stated aim of supporting mortgage misfits, Ipswich is launching three new mortgage products to best suit different self-employed groups.
The self-employed specialist.
A two-year 75% LTV discount mortgage available for purchases and remortages at 3.59% (5.4% APR).
This is available for loans up to £350,000 and offers an application fee of £199, a completion fee of £800, unlimited overpayments and no early repayment charge.
The applicant must be in the same line of work as carried out for the previous three years and have accounts for a minimum of a year.
Income can be verified to the 12 months accounts in the first instance or via HMRC self-assessments (SA302).
The self-employed professional.
A two-year 90% LTV discount mortgage available for purchases and remortgages at 3.99% (5.4% APR).
As available for loans up to £500,000 and with a low application fee of £199, a completion fee of £800, unlimited overpayments and no early repayment charge.
This is aimed at those in a professional occupation, such as solicitors, architects, accountants, dentists, doctors, surveyors, pharmacists, vets and optometrists, and who have been working as part of an established partnership of at least three years.
The Society will consider up to 90% LTV for applicants who can provide accounts for over a year but will also consider up to 75% LTV for applicants who have accounts for the period of less than one year provided they work at an established firm.
The contractor.
A two-year 90% LTV discount mortgage available for purchases and remortgages at 3.99% (5.4% APR).
The product is available for loans up to £750,000 and offers a low application fee of £199, a completion fee of £800, unlimited overpayments and no early repayment charge. This excludes the Construction Industry Scheme (CIS).
Ipswich said it coined the term Mortgage Misfits to describe those who find themselves overlooked by the main high street lenders on account of their status, including older borrowers, self-builders, those facing major life changes and the self-employed and contractors.
Rather than adopting a computer says no' approach used by many lenders, the Society said it relies on manual underwriting to make sensible but fair lending decisions.
Chief executive Paul Winter said: "Too many credit-worthy borrowers with unusual circumstances are overlooked by mainstream mortgage lenders and our view is that mortgage misfits', including the self-employed, freelancers and contractors, should have the same level of choice and access to the mortgage market as any other group."
The Ipswich serves the East of England and further afield through its broker relationships.
Comments