Before the credit crisis began self employed individuals had no difficulty achieving remortgages, secured homeowner loans or mortgages, but for the past three years there were a lot of changes, and those working for themselves were left out in the cold and in the position of finding it very hard to get secured loans, mortgages or remortgages.
Before the beginning of 2007 self employed people were quite frequently in an even better position than employed people wanting remortgages, mortgages or secured loans.
What made it easier for them to obtain any loan product compared to those who were employed, was due to the fact that secured loan and mortgage lenders carefully view the ability of the loan borrower to make payment..
Secured loan lenders mainly, although it can vary from one to the other, take 40% of gross income to cover all the financial outgoings. The outgoings concerned are the first mortgage repayment, the payment of the secured loan needed and any other un consolidated loans and credit card, that means those not being cleared by the loan.. The loan repayment taken into account is the actual monthly payment for the loans and 3% of the outstanding credit card balances are taken into the the sums
However there is no need to consider the other debts as many people want secured loans to sort out debt consolidation which means that all debt is paid and only one secured homeowner loan is left.
Often employed people were declined due to insufficient income.
This never happened with those who were self employed and they were never declined for secured loans through not earning enough , as they only needed to self declare what they earned on their letter head and no additional proof was asked for.
It was extremely common self employed to declare more earnings than they actually had and before long fell into difficulty as regards their loan payments.
The recession changed this position and full accounts or an accountants letter were a must when applying for mortgages and remortgages.
This was an unlucky situation for self employed such as hairdressers who frequently get paid cash in hand and have no proof of their real earnings.
There is still one homeowner loan provider who grants these loans on self declarations of earnings but the biggest loan on this plan is around 25,000. It is however a good method for self employed people with no official income proof to obtain the secured loans they could well benefit from.
Learn more about secured loans then approach Champion Finance for the best remortgage fror you.
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