subject: It Was Simpler For The Self Employed To Apply For Secured Loans, Mortgages And Remortgages. [print this page] When it comes to applying for secured loans, mortgages and remortgages, the income requirements for employed applicants is very straight forward, and it is as simple now as it always has been, and that is that the applicant must provide wage slips. These are normally the last three consecutive ones for all applicants for the finance.
Granters of secured loans consider that 40% of the total earnings of the applicants must be sufficient to pay the monthly mortgage payment, the homeowner loan being arranged and any other debts remaining on credit cards, personal loans, etc.
However, there are loan providers who take up to half of the applicant earnings if they have good incomes.
As regards remortgages and mortgages, the income multiplier varies from one mortgage lender to another, with some taking three times an applicants income as the maximum mortgage that they can borrow, and others accept up to five times the income.
This means, that based on earnings of 50,000, some mortgage providers would lend ut to 150,0000, while others would lend as much as 250,000
Therefore, as there are firm guide lines on income for the employed, there is always the possibility of them being declined for any of these home loans on the grounds of insufficient income.
Before the recession, this was never the case for the self employed who could declare their own earnings when applying for any of these financial products.
This was called a self cert.,. and it enabled the self employed to get the mortgage they wanted to buy a property, or to obtain a remortgage or secured loan that they could use for any number of purposes including as debt consolidation loans.
Therefore, the self employed were at an advantage compared to the employed, but the recession ended all that
