In our new climate of tougher regulation, there are several groups of borrowers who now find themselves struggling to secure a mortgage, and the Times looked this weekend at those who don’t ‘fit the mould’.
The newly self-employed, for example, can find it difficult to get a mortgage, as many lenders require 3 years accounts or SA302 forms as proof of income. The good news here is that some lenders are relaxing their criteria to accommodate the increasing number of people who have chosen to work for themselves, and will now consider 2 years accounts, or even 1 year in some cases.
As a nation we are living longer and working later in life, yet older borrowers have continued to struggle when it comes to securing a home loan. Building societies have led the way here however, and some of the larger lenders have followed suit, increasing the age they will lend to.
Continuing on the subject of the older borrower, the Sunday Express reported on figures revealing that 1 in 4 people who plan to retire this year will do so with an average debt of £24,300 and 4 in 10 will continue to have a mortgage.
Experts advised taking action now. Those with interest-only mortgages should be reviewing their repayment plan, while borrowers with a capital and interest mortgage are urged to check that the term will result in the mortgage being cleared by retirement.
Now is also a good time to take advantage of record low rates by switching deal, and overpaying wherever possible to reduce the debt.
What the papers said about tackling debt and mortgage ‘misfits’