Virgin Money lower self-employed mortgage income multiples
Virgin Money has lowered its maximum loan-to-income multiple for self-employed mortgage applicants.
The bank previously lent up to five times salary, but the limit has been lowered to a maximum of 4.49 times income. Employed borrowers will still be able to secure up to five times salary mortgages.
Aaron Strutt, product director at Trinity Financial, says: “Many of the lenders are trying to make it easier for self-employed borrowers to get a mortgage, so this is an unusual move. HSBC has just amended its criteria and now requires two years trading accounts, rather than three.
“There are banks and building societies offering five times salary self-employed mortgages, and some lenders will take one year’s accounts into consideration. Others take the latest SA302 if the income is much higher than the previous year.”
There are approximately 4.8 million self-employed workers in the UK, representing 15% of all people in work.
Increased mortgage term
As part of the same criteria change, Virgin Money has increased the maximum mortgage term from 25 years to 35 years. The idea is to lower monthly repayments for first-time buyers, younger borrowers and the self-employed.
The financial regulators are watching banks much more closely and as a result acceptance criteria is changing much more frequently. Mortgage lenders routinely change their income multiples.
For help to secure a self-employed mortgage, call Trinity Financial on 020 7016 0790.
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