It is generally thought that if a person is self-employed, their mortgage options are limited. And if that person is also aged 50 to 90+, those options become even narrower. Of people we surveyed in their 50s (of all professions), only 4% had any idea they could get a mortgage. For those in their 80s, it dropped to 2%.These are shocking statistics because nobody is ever too old to get a mortgage they can afford, including the self-employed. All it takes is a lender with a can-do approach.
At LiveMore, for example, our mortgages are designed to help people aged 50-90+, including those who are self-employed. We have no maximum age for self-employed, but instead look at occupation and plausibility.
Solutions needed for a huge part of society
It’s surprising that mortgage applications are so challenging for such a significant sector of society in terms of sheer numbers. There are around 4.3 million self-employed people in the UK, and the largest proportion of them – 1.8million – are aged 45-54. Almost 1 million are aged 55-64, and nearly half a million are 65+ *. If they can afford a mortgage, why do lenders make it so tough for them to get one?
Lenders willing to show a can-do attitude can not only reach a large base of great customers, but also make a huge difference in many lives.
Helping the self-employed aged 50 to 90+
Flexible criteria is essential to helping the self-employed, including the newly self-employed who face a tough time in the mortgage market at any age. That’s why at LiveMore, we can consider applicants with one year of self-employed figures.
This can be a lifeline for anybody who went self-employed during the pandemic. It’s also helpful for people who used the Government’s Self-Employment Income Support Scheme (SEISS), which can go against them in some lenders’ eyes, but a lender that manually underwrites each case should be able to find a way forward.
At the same time, the Covid pandemic affected many self-employed people who were unable to work during the lockdowns, meaning their income might have been lower than in a typical year.
For example, one of our customers, aged 58, wanted to remortgage to buy out his ex-partner and move on after their divorce. But his self-employed income had reduced dramatically because of COVID.
Every high street lender turned him down. However, we considered what his income was likely to be post-covid, based on his previous track record, as well as accepting other income he had in the form of health and grant payments from the Government.
When our can-do approach helped him, he said: “LiveMore saved my life.”
Like this customer, who has various income sources, many self-employed people find income is an issue when they approach lenders who deem the case to be too complex.
However, if a lender considers all forms of income, mortgages often become affordable for many self-employed who may have thought they were running out of options. For example, we’re open to contractor’s income, and we’ll consider day rates or the previous year’s earnings.
The self-employed sometimes have foreign income, which many lenders will not accept but this is where it’s important for an intermediary to know their lender, as lenders like LiveMore will still accept overseas income, as long as it’s not the main source of money coming in. We can also consider net profits or retained earnings in limited companies as well as dividends, even when the borrower is no longer working.
So, whatever the profession of your self-employed clients, they may be more eligible for a mortgage than you think. We welcome most income and property types, and we always look for ways to say yes – even in ‘not your average’ cases.
*statistic source https://www.statista.com/statistics/318435/self-employment-uk-age-group/
Phil Quinn is head of intermediary sales at LiveMore
