A major high street mortgage lender has updated its lending policy to enable SEISS grant applicants to take advantage of borrowing opportunities.
With the pandemic hitting many self-employed workers hard, the government’s grant scheme has provided a much needed financial boost for plenty of people over the course of recent months.
This could potentially have disrupted mortgage applications. But this latest news is excellent for any self-employed worker, including contractors and freelancers, who may have been looking for a mortgage but faced hiccups in that journey.
What is a SEISS grant?
The Self-Employed Income Support Scheme has been a godsend for many self-employed workers whose usual mode of working has been affected by the changing circumstances the pandemic has brought.
The government has dished out in excess of £25 billion to almost 3 million self-employed workers since the scheme’s launch in May last year.
Which lender is changing its lending policy?
NatWest, one of the leading mortgage lenders in the UK, has committed to lending to applicants who have received a SEISS grant.
Provided that the SEISS grant was not applied for within three months of the application being made, NatWest will be happy to lend provided all other criteria is met.
The updated lending policy will see NatWest use income assessment methodology. This will take into account either an applicant’s average earnings over the past two years, or the most recent year’s income. The lower of these two will be used to decide is an application can proceed.
What does this mean for me?
Underwriters will assess mortgage suitability using the last three months of bank statements from any applicants. This means that if you took a SEISS grant at the start of the pandemic, it will not be a factor when making an application moving forwards.
This is perfect news for any self-employed worker who may have been looking to get a mortgage, but fears the effect on their personal finances from the pandemic will rule that possibility out.
The SEISS grant scheme was something necessary for many workers, particularly when the pandemic was at its worst and working in normal ways were a long way off.
The application to the scheme may have been necessary, but could have felt like a black mark that prevented you from committing to sorting a mortgage for yourself.
NatWest’s willingness to change their lending policy around this could signal a wider change. This could be a sign of lenders understanding and accepting the need to be flexible around lending to self-employed workers who may have had particularly tough months since the start of the pandemic.
For any contractor mortgage and freelancer mortgage applicants who have put things off because of financial ups and downs since the pandemic started, there is an opportunity to get back on track. Hopefully other lenders will follow suit and more and more self-employed applicants will be able to secure that dream mortgage before long.
Bear in mind that you can get free mortgage advice to establish the best course of action.