Anyone who is self-employed or works as a freelancer or contractor will know that securing a mortgage can prove somewhat challenging, certainly more so than for people who are in permanent employment.
Couple this with being a first-time buyer and you could be forgiven for believing the odds are stacked against you.
Back in 2014, Tom Wadsworth, then aged 26, set his heart on buying a quaint one-bedroom cottage in the idyllic East Yorkshire village of Brantingham. As both a newly self-employed electrician and a first-time buyer, Tom reckoned he didn’t stand much of a chance of getting a mortgage. Fortunately for him his mum – who works in the finance industry and was already a Beverley Building Society customer – approached the Society about re-mortgaging her own home and was soon in a position to make a cash purchase of the cottage on his behalf.
Becoming a homeowner
Then in 2016, armed with two years’ accounts showing his income and tax returns, Tom visited the Society’s office in Beverley town centre and, without further ado, agreed his own mortgage, enabling him to buy the property from his parents and take his first proud step onto the property ladder.
Tom said: “That was my first experience of Beverley Building Society. Mum has been a mortgage consultant herself so I completely trusted her recommendation. She was right – Graham, the Society’s Head of Lending, was great, everything was so straightforward and I was very happy with the terms. I saw Mortgage Manager Jess to finalise everything, and she was brilliant too.”
Securing a self-employed mortgage means keeping accurate records of things like turnover, expenditure, profits and dividends, in order to demonstrate a stable income which is sufficient to honour your potential mortgage payments. At the Beverley, we specialise in niches like this one, and take the time to look at someone’s circumstances in the round, as we did with Tom, considering a variety of factors. We will even consider lending to people who have been trading for just one year, depending on their full circumstances. We take factors like salary, dividend, net profit, retained profit or a mix of all three, into account, and will allow all types of self-employed status, such as sole trader, director of a limited company or part of a limited liability partnership. And we allow a wide range of evidence, including SA302s, tax computations, full accounts or, in some cases, a simple accountant’s reference.
Finding the perfect property
Before long Tom’s girlfriend Alex, a medical sales rep, had moved into his tiny home and the couple were feeling the squeeze. Tom laughed: “We desperately needed more wardrobe space!” In 2018, Tom found a buyer for his ‘des res’ cottage almost instantly and so the hunt began for a more spacious home on the south bank of the Humber, where Alex originally lived.
The couple arranged to view a detached 1930s house in Barton. Tom said: “The moment we walked through the door we knew it was perfect for us. There are four bedrooms and a huge garden; there’s an outdoor office that Alex can use and a huge garage for all my stuff.
“We were really impressed by the quality of the interior finish. My dad’s a joiner and I’d grown up in a house with lovely touches like big wooden doors, so this place immediately felt like home to me.”
Raising a joint mortgage on the new property was a relatively simple matter for Tom and Alex as the Society waived the early repayment charges that applied to their previous mortgage and once again offered them competitive rates. “I didn’t think twice about staying with the Society,” Tom added. “I was more than happy with the way they looked after us. Some of my workmates who are also contractors have had absolute nightmares getting good mortgages with other financial providers.”
Pulling out all the stops
Very few property sales run completely smoothly and in the week leading up to the exchange, there were a few issues elsewhere in the chain that threatened to delay the process. Tom said: “The Society pulled out all the stops to get the paperwork sorted the day before we were due to move in. Our solicitor was really impressed with them and said they’d never known a mortgage lender to be so helpful, flexible and easy to deal with.
“It was good to know we could just give them a call whenever we needed to, and Mortgage Managers Jess and Annette were brilliant.”
The couple have also opened a mortgage offset savings account with the Society, whereby they save on paying mortgage interest on the sum they have saved at any given time. “It just made sense,” said Tom. “We know it will save us a lot of money in the long run.”
Tom and Alex celebrated Christmas in their cosy former home before making the big move to Barton in early January 2019, and their two-year mortgage will be due for renewal in 2021. So, do they plan to stick with their family’s favourite building society (Tom’s sister Abi also chose the Society as her mortgage provider)?
“We will naturally have a look around to check the rates are competitive,” Tom added, “but I think we’ll struggle to find a lender that cares as much about giving a good, personal service, and that’s really important to us.”