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Leeds Building Society’s Lending Criteria for Contractor and Self-Employed Mortgages:

Securingn a mortgage as a contractor or self-employed individual can be a complex process, but Leeds Building Society (Leeds BS) aims to streamline this journey for applicants. This article delves into the intricacies of the lending criteria set by Leeds BS, focusing on the application submission process and key considerations for borrowers in these categories.

Leeds Mortgages Application Submission

Leeds BS understands the importance of a swift and efficient mortgage application process. While the Society commits to expediting applications, intermediaries can significantly contribute to this by ensuring all necessary documentation is provided upfront. A checklist to guide through the required documentation can be accessed on the Leeds BS website, enhancing the application’s speed and accuracy.

Borrower’s Profile: Key Affordability Considerations

Affordability stands as a central pillar in Leeds BS’s lending criteria. The Society assesses the borrower’s ability to repay, considering the impact of potential interest rate fluctuations. For home-movers and remortgages up to 85% Loan to Value (LTV), Leeds BS lends up to 4.75 times gross income, while first-time buyers or LTVs over 85% can secure up to 4.5 times gross income. All income for affordability must be in Pounds sterling and substantiated with evidence.

To streamline this process,  contact MortgageTek so we can estimate how much you can borrow using the Leeds BS  Affordability Calculator. It is crucial to note that individuals contributing to the household through rent payments or possessing independent income may be excluded from the affordability calculation.

Financial History: Bankruptcy, Convictions, and Credit Scores

Leeds BS places restrictions on applicants with a history of bankruptcy or Individual Voluntary Arrangement (IVA), considering only those discharged more than six years ago. Convictions may also impact eligibility, with the Society excluding applications with pending prosecutions related to dishonest activities.

Credit scores play a pivotal role, with Leeds BS conducting a credit search using an approved Credit Reference Agency. The Society utilizes credit scoring, considering factors such as missed mortgage payments, arrears on credit agreements, and property repossessions within specific time frames.

Maternity Considerations

For employed applicants on maternity leave or anticipating it, Leeds BS requires information on the expected return to work date, salary, and anticipated childcare costs. Affordability assessments during maternity leave take into account the child and may necessitate evidence of contingency funds to cover mortgage payments.

Number of Applicants and Residency Requirements

Leeds BS welcomes both single and joint mortgage applicants, allowing additional applicants (up to four individuals) if they are close family members. However, caution is advised to ensure the loan’s purpose benefits all parties proportionally. Residency requirements mandate applicants to be UK taxpayers, paid in Pounds sterling, and have resided in the UK for a minimum of the last two years.

Employment Status: A Detailed Overview

Leeds BS accommodates various employment statuses, including contractors, directors of limited companies, sole traders/partnerships, employees, and those with second employment. Each category has specific affordability criteria:

1. Leeds Contractors Mortgages: Acceptable, including those using umbrella companies, assessed as self-employed.
2. Directors of Limited Companies: Affordability based on payslips (salary), dividends, etc., with distinctions for shareholding percentages.
3. Sole Traders/Partnerships: Affordability based on net profit or individual share of total profits, requiring full financial accounts for underwriting.
4. Employees: Must be in permanent full or part-time employment for the last six months, including any probationary period.
5. Second Employment: Additional employment income is considered in line with standard income assessment.

Leeds  Self-Employed  Mortgages

: In-Depth Financial Assessment

Self-employed individuals face a meticulous evaluation, requiring a business to have traded for at least two years. Leeds BS supports thriving businesses but also considers those with reduced profits, subject to underwriter satisfaction regarding income sustainability. Affordability assessments are based on average profitability over the provided financial accounts period.

Accounts endorsed by qualified accountants from recognized institutions serve as acceptable evidence of earnings. Short-term contracts are considered if renewed or with a solid 12-month employment record in the same field.

Navigating Leeds Building Society’s lending criteria for contractor and self-employed mortgages demands a thorough understanding of the application submission process and key affordability considerations. By adhering to the guidelines outlined in this comprehensive guide, prospective borrowers can enhance their chances of a seamless mortgage approval process with Leeds BS.