30 Jul Mortgages refused for some with SEISS grants
Self-employed buyers are finding that some high street lenders are refusing mortgages if they have received government grants during the Covid pandemic.
Those working within the travel, hospitality and entertainment sectors are those that are impacted worse.
It comes as a recent report from the BBC showed that many lenders are not currently accepting mortgage applications from people who are on furlough; those who have had Covid related grants are deemed as ‘high risk’ according to some brokers.
NatWest and Royal Bank of Scotland, two of the UK’s biggest lenders on the high street, are refusing any applications made from people who took the government SEISS grant – the self-employed income support scheme.
A spokesperson said; “As it stands we aren’t accepting applications from customers who have applied for a SEISS grant on or after 14th July 2020. As a responsible lender this is part of the banks affordability criteria.”
Those that are self-employed have been asked to pay a larger deposit if they have taken out an SEISS grant – Metro bank require a minimum of 20% and Santander 25%.
In addition, a number of lenders which includes TSB, Lloyds, Yorkshire Building Society and Virgin Money stated they would not accept mortgage applications from people who are current on furlough, and that furloughed incomes isn’t included when they complete their affordability assessment.
Fairer Finance and other consumer groups are calling for the financial regulator to investigate urgently which lenders are penalising borrowers so that action can be taken.
At Best 4U Mortgages, we have access to a wide panel of lenders and because we assess your individual situation beforehand, we are better placed due to our wealth of experience to work out which lender could be a good fit for you and your mortgage needs. Should there be an area that is causing an issue we will help you make a plan going forward – contact us today on 01536 411 144 for a chat.