Santander has tightened its acceptance criteria for self-employed applicants following the governments latest lockdown announcement. The bank now requires business owners to have a 40% deposit to qualify for its mortgages.
If you do have a large deposit and you are self-employed, Santander will look at your companies turnover during the last three months, and then annualise the figures to ensure they are reflective of the normal year-end turnover. Santander will not lend to self-employed borrowers whose business is not trading due to Covid-19 restrictions.
Aaron Strutt, product director at Trinity Financial, says: "The lenders are looking at applications from the self-employed much more closely, but some of them are still keen to attract borrowers working for themselves, especially if the pandemic has not hit them. Our brokers have access to lenders willing to take the time to assess cases, and they will not simply decline applicants for running their own firm.
"If borrowers have applied for government grants or government loans, they may well find it harder to get a mortgage. Bounced direct debits or unauthorized use of overdrafts may also cause issues and lead to an automatic decline."
Santander’s self-employed policy for existing mortgage customers moving home and buy-to-let applications remains unchanged.