Getting Self-Employed Mortgages After a Seiss Grant in the UK

What is a SEISS Grant?

The Self-Employment Income Support Scheme, or SEISS, is a UK government program designed to help people who work for themselves.

If you’re self-employed and you’ve faced money troubles during the COVID-19 pandemic, this grant can provide some financial relief.

How does it work? Well, the government gives you money to replace some of the income you might have lost. 

This helps you cover your basic expenses like rent, groceries, and yes—even a mortgage. It’s not a loan, so you don’t have to pay it back. However, it does count as income, which means you might have to pay some taxes on it later.

SEISS grants are meant to be a temporary help during tough times. If you’ve claimed one, it’s essential to know how it might affect other financial areas of your life, like getting a mortgage.

But remember, having a SEISS grant doesn’t automatically make getting a mortgage impossible. It’s just one piece of your financial picture that lenders will look at.

Can You Get a Mortgage After a SEISS Grant?

Yes, it’s possible, but there are some hurdles to consider.

Certain mortgage lenders may be cautious if you’ve received a SEISS grant. They may think it’s a sign you’re not making enough money on your own.

However, the SEISS grant is officially counted as income. Some lenders may be more lenient if you can prove you’ve returned to work and are earning sufficiently.

Yet, be prepared for a thorough review from other lenders, who might scrutinise your application more closely due to the SEISS grant.

So, the lender you pick really matters. Some are more accommodating toward SEISS recipients, while others may proceed with caution.

A small number may even decline your application outright. This is where specialised advice can benefit you.

Consulting with brokers who focus on self-employed mortgages can be invaluable. They understand which lenders are amenable to SEISS grants and can assist you in finding a mortgage with the most favourable terms.

When Is the Right Time to Apply for a Mortgage?

If you’ve taken a SEISS grant, timing is crucial when considering a mortgage application. 

The general advice from mortgage experts is to wait at least 3 months after you’ve returned to regular business operations. 

Why? Many lenders will request at least 3 months’ worth of business bank statements to confirm you’re back in stable financial waters. 

Although there are lenders out there not overly concerned with this, you’ll likely find more receptive lenders if you apply after demonstrating three months of healthy trading.

Eligibility Requirements: What to Expect

If you’ve had a SEISS grant, your assessment will be the same as standard mortgage criteria for self-employed individuals. But expect some EXTRA conditions. 

Here’s what some lenders might ask you for:

• Bank statements from the last three months to show you’re working again
• A clear reason why you needed the SEISS grant
• Extra financial checks to make sure you can pay back the loan
• Information on how much SEISS grant money you got and for how long
• A deposit for the home that DIDN’T come from the SEISS grant

Different lenders have different rules. Some might be okay with the SEISS grant, and others might be more careful.

If you’re not sure, a mortgage broker who knows how to help self-employed people can point you to the right lender.

Lenders Who Consider SEISS Grant Recipients

There are various mortgage lenders open to applicants who have claimed a SEISS grant, but their rules can differ. For instance:

• Post Office Money may ask for proof that you’ve gone back to work and extra paperwork for their review team.
• Furness Building Society, Foundation Home Loans, and Accord Mortgages are generally open to SEISS grant claimants, often with few added conditions.
• Vida Home Loans asks for grant approval details and will think about your application, but the grant can’t count toward your ability to pay the mortgage.
• Santander is open to applications if you’re currently working and it’s been at least three months since your last SEISS grant.
• Aldermore looks at each SEISS grant claimant individually, but you can’t use the grant money for a down payment.

However, some lenders like Natwest, Precise Mortgages, and Ipswich Building Society currently won’t consider SEISS grant claimants.

Keep in mind, that this info can change, so it’s not advised to go straight to a lender based on this alone. Most experts recommend looking at ALL options before making a decision.

Counting SEISS Income in Your Mortgage Application

Getting a mortgage lender to include your SEISS grant as part of your income can be a challenge. Many lenders won’t consider it when figuring out how much you can borrow.

That said, some lenders will let you count all of your SEISS income along with your regular earnings, but only under the right conditions. 

One big thing that helps is if your business is doing well again after you got your last grant. You’ll need to show at least three months of good business to prove this.

Want to use SEISS money for your down payment? That’s another tricky area.

Some lenders say no, so you’ll need to be careful. A skilled broker who knows the needs of self-employed people can guide you.

They can help you find a lender who will consider your SEISS income when deciding how much you can borrow or if you can use it for a down payment.

Can You Remortgage with SEISS Grant Money? 

If you’re considering remortgaging to secure better rates, having income from a SEISS grant doesn’t necessarily mean you’re out of options.

Several mortgage lenders are willing to consider your SEISS grant income as part of your overall financial picture.

Consulting a mortgage broker can be a KEY step in this process. A broker can help YOU find lenders that are open to considering SEISS grant income. The can guide you through the application and boost your chances of approval.

Key Takeaways

• A SEISS grant doesn’t automatically stop you from getting a mortgage. Some lenders are happy to consider your application.
• Lenders will treat your SEISS grant as income but will check your application more thoroughly.
• Specialised mortgage brokers can help you find lenders who are open to SEISS recipients.
• It’s best to wait 3 months after your business is back to normal before applying for a mortgage to improve your chances of getting approved.
• You might need to give extra documents like recent bank statements and explain why you needed the SEISS grant if you’ve received one.
• Lenders have different rules about SEISS grants; some might not accept your application if you’ve received one.

The Bottom Line: For Your Next Steps…

Applying for a mortgage with SEISS grant income comes with its own set of challenges, but it’s far from impossible. The KEY is to get professional advice tailored to your unique situation.

Contacting a qualified advisor can make a world of difference. They’ll do more than just help you find mortgage lenders that are likely to accept you; they’ll evaluate your complete financial situation.

This includes reviewing your business performance, how long you’ve been in business, and your credit history.

Additionally, your advisor will consider the specific property you’re interested in. This thorough review ensures you match up with lenders that not only are likely to approve you but could also offer you more favourable terms. This could save you a significant amount of money over the life of your mortgage.

Ready to get started? Complete our quick online form, and we’ll connect you with a mortgage advisor who specialises in working with the self-employed.

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