Getting a mortgage

Preliminaries

Many escorts do not realise that they are as entitled to apply for a mortgage as any-one else. Most escorts are classified for tax purposes as self-employed. So, if you are already paying tax, or are about to start paying tax, perhaps you would like to think about getting a mortgage, to buy a property and invest in your future.

Really the rules about mortgages for escorts are no different than for any other self-employed people, or shouldn’t be. I have worked as an escort and as a mortgage broker and I got my first mortgage when I was an escort.

I did not declare that I was an escort. I was paying tax as a complimentary therapist. So to be honest I do not really know how mortgage providers will react if you say you are working as an escort. I shouldn’t think they will be moralistic but they may view you as more of a financial risk (e.g. they may think you are only going to work for a year, so may not be a good risk for a 25 years mortgage). So the decision as to whether you tell them you are an escort or not is yours alone. The only thing I would add is if you are not going to tell them you are an escort please make sure that the job you say you do is the same as the one you pay tax under!

Usually I would not advise anyone to have a mortgage that is more than three times their annual income. So for example, if on average you earn say £35,000 a year your maximum mortgage should be no more than £105,000.

Remember also to make provisions if you suddenly cannot carry on working. I would recommend that you look at private Unemployment Insurance to cover your mortgage if you become ill etc. (Your broker should be able to advise on this). And also I would recommend that you look at rental properties similar to the property you are looking to buy and see if, in an emergency, the local rent charged could cover your mortgage payments. (Of course you may have to live elsewhere for a while, but this would be the worst case scenario so you don’t lose your property).

Many lenders may allow you to do this if you seek their permission but I would advise that you get legal advice before you do because some clauses in the lease, (if the property is leasehold), forbid the renting out of the property.

PLEASE NOTE: Many mortgages are not covered by payments from the Income Support if you become ill or get pregnant. Seek advice from the Citizens Advice Bureau before you buy a property if you think this may be likely to happen to you.

(There are links at the end of this article to websites that can help you if you get into difficulties.)

What Mortgages are Available?

The following mortgages are available for the self-employed:

Non-Status Mortgages (also called Self-Certification Mortgages)

Non-status is a term generally used by mortgage and remortgage lenders when your employment or self-employment income is not easily proved or comes from a variety of sources. (For example you may have a day job and work as an escort in the evening.) Many high street mortgage lenders take a cautious view of the self-employed or other people who have difficulty proving their income. And also of people who earn their income in a cash business such as many escorts do. If you have difficulty proving your income, for example you are unable to provide two or three years’ accounts, or you do not have accounts, (because you are just starting out in the escort business for example), then a non status mortgage) may be the way forward.

With a self-certified mortgage you do not have to provide accounts, payslips or other proof of income, but instead you simply certify that you have sufficient income to service the repayments. You could qualify for up to 95% of the purchase price.

This type of mortgage could be particularly useful if you have just started escorting and therefore have no accounts, but already have a substantial cash sum to put down as a deposit on a property. (Bear in mind though that you will have to start paying tax and that you may need to justify to the Inland Revenue, (the ’tax man’), how your deposit originated e.g. was it a gift or left in a will etc.) Non status mortgages are offered by UK mortgage lenders without the need to provide proof of income or previous mortgage history. You simply have to make a declaration that you can afford to meet the monthly payment on the amount you wish to borrow.

Even if you have adverse credit or previous arrears you could still be considered for this type of mortgage.

One thing I would add about this type of mortgage is that the interest is usually higher than that of high street mortgage lenders because the lender in this case is taking more risk.

Many of the non-status mortgage lenders only accept business through mortgage brokers and many of them are not available in the high street.

Self-Employed Mortgages

If you are able to provide two to three years of accounts you can get an even better deal on a self-employed mortgage. This will be at a better rate than a non-status mortgage.

Some high street lenders will consider the self-employed for this type of mortgage. However, three years accounts will be better and your past mortgage/credit history will still be taken into account.

Some of the better deals, which may be more sympathetic to those with accounts but still with bad or no mortgage/credit history may be found with independent mortgage brokers.

For both types of mortgages flexible deals may be available. e.g.:

Flexible Mortgages

Innovative mortgage solutions are available which present you with a more flexible way to pay your mortgage when you are self-employed. If a flexible mortgage is important to you, payments can be tailored to meet your changing circumstances, so you can increase payments or pay lump sums when cash flow is good and reduce payments or take payment holidays when you need to.

I would suggest when buying a property that you only use a qualified solicitor that is experienced in helping people buy properties, (also called conveyancing) to help you. Another type of person who is qualified to do this is called a conveyancer.

And although you can cover the legal aspects of buying a property yourself and there are books on the market that suggest this is easy, I would strongly recommend against this.

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Advice for getting a mortgage:

UK Mortgages Brokers Directory

If you need help because you have been mistreated by a mortgage broker:

The UK Financial Ombudsman

If you have problems paying for a mortgage:

Citizens Advice Bureau

General Help for the Self-Employed

Federation of Small Businesses

Good Luck!

The forgoing advice is given in good faith but should not be considered a substitute for appropriate professional or legal advice. Always consult a qualified solicitor and a qualified financial adviser before taking out a mortgage or buying a property.