Non Status Mortgages
Non Status Mortgages - Not Just For The Self Employed!
You may have heard the term non status mortgages before and wondered whether this type of homeloan applies to you. Well, non status mortgages apply to anyone who finds it difficult to prove their income.
There are various reasons why you might find it difficult to prove your income. Firstly, you may own your own business and therefore minimise your income - in full accordance with generally accepted accounting practice - in order to pay less tax. This could show your net income to be less that it actually is and therefore you may find it difficult to get a traditional mortgage. Non status mortgages could, in that case, be more suitable for you.
Business owners that have a full set of accounts for three years or more will probably be able to apply for what is known as a full status mortgage. However non status mortgages are for those borrowers who do not have a full set of accounts for three years or more. This could be because you have not yet been in business for three years if, for example, you have just launched a start-up company.
In addition to those who run their own businesses, non status mortgages are also suitable for one-man bands who work for themselves. For example, hairdressers, mechanics, beauty therapists and plumbers are all examples of people who may work for themselves. Again they might find it hard to get a traditional mortgage as proving their income could be difficult.
Non status mortgages are also ideal for the growing army of contract workers in the UK. The IT industry in particular has thousands of people who work on medium to long-term contracts before moving on to a new contract with a new company. Freelance journalists, illustrators and PR professionals add to the number of borrowers for whom non status mortgages offer a straightforward way on to the property ladder.
Perhaps you have various sources of income which could include paid employment freelance work, income from investments or a trust fund. Therefore your payslips would not give a fair representation of your earnings and what you could afford to borrow.
The last group of borrowers for whom non status mortgages are ideal are those with varying levels of income. Many employed borrowers have different monthly incomes, especially the millions of people employed in sales roles up and down the country. With salaries based on commission, one month's wage can be extremely different to another's and this can make proving your income to a mortgage lender extremely difficult. Many high street lenders will only take into account 50% of commissions or they will work out an average of the last three years which may not work in a borrower's favour. Non status mortgages allow borrowers to self-certify their income and the affordability of any mortgage.
So if you have different income streams or find it hard to prove your income, perhaps it's time to consider non status mortgages as the right option for you.
