Business owners and the self-employed can find it difficult to get a mortgage at the best of times. COVID-19 and the resulting lockdown has made this even more of a challenge.
However, mortgage lenders also face challenges of their own. These include their staff working remotely, surveyors in lockdown and restrictions placed on solicitors.
Add the perceived risk around virtually every business in the UK and you may think arranging a mortgage would be impossible.
Fortunately, this isn’t the case. Within the last week we have been able to place a £1.275m mortgage on a £1.5m property (85%) with a private bank accepting 75% on interest only. We’ve also placed a £600k mortgage on a £900k property with a high street bank completely on interest only.
Both of these examples required the use of business profits as opposed to salary and dividends (which were £70k for the first example of £40k for the second). Although these are larger than average loan sizes, it illustrates the point that there is still an appetite to lend to business owners.
To be honest, this was more difficult due to COVID-19. There were many lenders who were unable to help who would have prior to the outbreak. For the lenders that did accept, they were asking more information around the impact of COVID-19 on the business and sustainability. Each case was closely scrutinised and had to be properly presented for the best chance of success.
However, it’s encouraging to know that there are still lenders with an appetite to lend mortgages to business owners. As long as the business is robust, profitable and sustainable, there are still options available and this has to be a positive.
As with many other businesses at the moment, it’s just more challenging.
If you’re a business owner or self employed person looking for a mortgage or insurance, contact us for a FREE consultation with no obligation.