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Nationwide caps self-employed mortgages at 85% LTV

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Written by: Lana Clements
27/10/2020
Nationwide has capped its self-employed mortgage range down to 85% loan to value (LTV), in a blow to low equity borrowers working for themselves.

The lender is continuing to offer mortgages at 90% LTV for employed first-time buyers.

Underwriting for self-employed borrowers has become “much more complex” because of the Covid crisis, Nationwide said.

The reduction in the maximum LTV brings Nationwide in line with other lenders, the mutual added.

The move is a temporary one and Nationwide said it hopes to be able to relax criteria back in the “near future”.

Deals for people working for themselves have become tougher since the start of the coronavirus as lenders closely scrutinise their future earning potential.

Brokers have said placing self-employed borrowers has become much tougher as lenders ask many more questions and for more detail on companies, such as bank statements.

A Nationwide spokesperson said: “We’re committed to supporting those looking to move home and are currently the largest lender still offering 90% mortgages to first-time buyers without any volume or time restrictions.

“We need to be able to maintain our high levels of service in the face of strong demand generated by the stamp duty holiday. Affordability must be at the forefront of any decision, even more so during these uncertain times. We must lend responsibly.

“As a result, the impact of Covid-19 means that underwriting mortgages for self-employed borrowers is much more complex than before as a result of the difficulties in being able to fully assess long-term affordability in these uncertain times.

“We are therefore temporarily aligning our maximum LTV for self-employed borrowers with other major lenders in the market. As with all lending policies, we will continue to review our approach and hope to relax criteria in the near future.”

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