Empowering the Freelance Economy

Help to Buy mortgage range launched for self-employed and contractors

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The Mortgage Lender has expanded its recently launched residential range with the addition of Help to Buy in England and Wales. Initial rates, which are available for self-employed and complex income borrowers, start at 3.77 per cent for a two-year fix at 75 per cent loan to value and 4.20 per cent for a five-year fix at the same loan to value.

  • The products are available to the whole of market across Real Life categories one to six, have a maximum loan to value of 75 per cent, and include a free valuation.

What is Help to Buy?

The Help to Buy: Equity Loan scheme offers borrowers a Government funded deposit of up to 20 per cent for properties in England and Wales rising to 40 per cent in London. The deposit, or equity loan has no repayments for the first five years of the loan.

The scheme is available to qualifying first time buyers of new build properties where the developer is a registered Help to Buy home builder.

Broker-friendly?

The Mortgage Lender sales and product director Steve Griffiths: “Brokers said what they really need right now is Help to Buy products for people who have impaired credit, complex income or are self-employed.”

The Mortgage Lender sales and product director Steve Griffiths said: “After relaunching our residential range a couple of weeks ago brokers said what they really need right now is Help to Buy products for people who have impaired credit, complex income or are self-employed.

We’ve built a reputation as a lender that is able and willing to assess each borrower on their individual circumstances and that has never been more important than it is now given the impact the pandemic has had on people’s finances.

We’re delighted we’ve been able to act quickly and launch Help to Buy within weeks of returning to residential lending with our core product range.”

When will the scheme end?

The Help to Buy scheme is set to run until 2023 in England and London. In Wales phase three of Help to Buy will be available from April 2021 to March 2022 with the possibility of a further extension to 2023.

Lending criteria for Contractors

  • Income calculation of up to a maximum of weekly rate x 48.
  • Existing contractors: Must have been contracting for a minimum of 12 months.
  • TML will only accept applications at present from existing contractors, not new contractors.
  • Current contract must be for a minimum of 6 months. Payslips and/or invoices supporting the contract and bank statements are required.

For any contract with a term less than 3 months remaining, confirmation to be provided from the applicants’ employer that their contract will be renewed and TML is satisfied with the applicant’s contracting history, if requested.

Renewal of contracts: Where the current contract length is less than 6 months and there is a history of renewal covering a 6 month period, with the same company, then this can be considered on a case by case basis.

Contractors do not qualify for RL7 and RL8 products.

Self-employed criteria

  • Minimum trading time 12 months.  Maximum 85% LTV.
  • Latest 3 months’ business bank statements and 1 month personal bank statement. Additional statements may be required.
  • Evidenced using: Most recent year’s certified accounts OR Tax Calculation with corresponding Tax Year Overviews OR SA302’s

TML will not accept an accountant’s certificate / reference.

Trading 12-24 months:

  • Maximum 85% LTV
  • Most recent year’s evidence required

Trading > 24 months:

  • Maximum 85% LTV
  • Most recent 2 years’ evidence required

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