New bid to help self-employed mortgage applications win approval

Saffron for Intermediaries has launched a campaign to help and support broker partners get more self-employed mortgage applications approved first time around. 

The building society says that since 2020 the self-employed have seen increasing challenges when applying for a mortgage and the ‘one size fits all’ approach of the larger lenders has posed challenges for more complex cases.  

Saffron For Intermediaries commissioned an independent survey to better understand how the self-employed feel about the mortgage market and what they perceive to be the stumbling blocks preventing them from achieving a successful application.  The survey went out to 1,000 self-employed people and the headline statistics include: 

⁃  Nearly half (49 per cent) said they wouldn’t feel confident finding a mortgage lender that offers an affordable self-employed product;

⁃  Only 19 per cent believe there is a good choice of lenders who offer self-employed mortgages;

⁃  Nearly three quarters of participants surveyed believe that being self-employed puts them at a disadvantage when applying for a mortgage; and

⁃  Only 15 per cent agreed with the statement that there are plenty of mortgage products available for self-employed individuals 

Saffron says the data captured by the survey highlights how important it is for lenders and brokers to work in collaboration to ensure self-employed borrowers know that there are products available for them. 

Now the building society has announced changes to its criteria, revealing more flexibility for the self-employed. 

From now, self-employed applicants with two years or more of trading accounts can access Saffron’s full range of products.  This opens “a whole raft of opportunities for the self-employed, including self-build and JBSP products” says a society statement.

To highlight how Saffron partners closely with its brokers to support them when filing a self-employed application, the lender has publicised a case study involving Kelly Sjoberg, a business development manager at Smart Advice Financial Solutions.

After returning to the UK from living abroad, Kelly’s client was looking to buy a house for her family. She found a property that was in a chain with a seller who had a short and fixed completion deadline, so the pressure was on to secure a mortgage as quickly as possible. 

Kelly’s client’s property search started three years after returning to the UK, which meant she only had two years of business accounts and a low credit score.  To compound matters, she had also taken some time off work for health reasons meaning her 2021 earnings were much lower in comparison to 2022.   

After reviewing her case Kelly realised that her client’s circumstances meant that most lenders wouldn’t consider her, but she did manage to select one that looked favourable given the lending criteria only requesting one year of accounts.  The application started to progress, however, as they neared completion the lender declared they would require an additional year’s accounts.  Unable to provide this, the offer didn’t materialise. 

After discussing her client’s complete case with the Saffron BDM, Kelly submitted a mortgage application immediately. The process that followed was smooth and fast, and despite the initial lender falling through, Saffron managed to deliver an offer ahead of the deadline.  

Saffron claims: “This is not an isolated case and Saffron is adept at working with brokers to get self-employed cases over the line when other lenders may not be able to support.”