Thursday, July 7, 2022

Self-employed twice as likely to be rejected for mortgage


Nearly a quarter (23%) of self-employed individuals have had their mortgage application denied in the past compared to just 12% of employed workers

Self-employed individuals are still twice as likely to be rejected for a mortgage, according to new research from The Mortgage Lender (TML).

Nearly a quarter (23%) of self-employed individuals have had their mortgage application denied in the past compared to just 12% of employed workers.

Of those who have ever tried to get a mortgage, 19% of self-employed applicants have had mixed results of whether their application was accepted or denied, compared to only 11% of employed individuals who said the same.

Even after taking steps to make themselves a more appealing mortgage applicant, such as a strong credit score, self-employed individuals are more easily deterred from getting a mortgage or do not see the benefits of accessing loans due to their employment status. In fact, less than two in five (38%) agreed that the strength of their credit score allowed them to access better loans and interest rates, compared to nearly half (48%) of employed people who said the same.

Peter Beaumont, CEO at The Mortgage Lender, said: There are around 4.2 million self-employed people in the UK, and it is typical for that number to grow when coming out of a recession, or in this case a pandemic also. While it may offer those workers more freedom, the major drawback of self-employment is the perception of income inconsistency, and consequently a greater challenge when it comes to borrowing large sums of money.

Fortunately, there are steps the self-employed can take to make themselves more attractive to lenders, like increasing their credit score, or saving for a bigger deposit to bring down their loan-to-value ratio, he said.

He said: At the same time, however, the onus must fall on lenders to be more open to working with these enterprising individuals.


The articles are for information purposes only and Invest for Property shall not be held responsible for any errors, omissions or inaccuracies within it. Any rules or regulations mentioned within the website are those relevant at the time of publication and may not be the most up-to-date.

Invest for Property does not endorse any of the products or services that appear on it or are linked to it and are not liable for any action that you may take as a result of the content of this website, or losses or damage you may incur doing so.

There is no obligation to purchase anything but, if you decide to do so, you are strongly advised to consult a professional adviser before making any investment decisions.

Please remember that investments of any type may rise or fall and past performance does not guarantee future performance in respect of income or capital growth; you may not get back the amount you invested.

Leave a Reply