Arts & Entertainment Industry Mortgages
Posted on 10th June 2022 at 15:40
Something we hear a lot is; “Wow, thank you! I didn’t think I could get a mortgage!”.
Why does anyone working in the entertainment industry struggle when applying for mortgages?
Let’s break this down:
What is a lender looking for when they assess your validity to pay them their money back?
They are looking for a good history of payments and debt handling. This is where your credit report comes into play. They scour this to check for any late or missed payments on everything from your credit cards, to your water bill and depending on the lender, this can be a deal breaker.
Each lender has a varying amount of acceptance for these missed payments with some lenders allowing a couple within a timeframe and some lenders expecting complete squeaky cleanliness!
Let’s assume your credit profile is perfect.
So they then need to look at the money you have to pay the loan back.
You show them your proof of income which is usually payslips, self employed tax returns and bank statements.
The lender will use the data from your credit profile to see that the extra monthly commitments you pay will fit in the affordability box. Things such as credit cards, loans and H/P.
The lender then looks to see what income/money comes in regularly, they also see if your day-to-day ins and outs can also accommodate the loan repayments. Then, just to make it a bit harder, they see if you could afford these payments if the loan suddenly went up by X%.
Let’s say your tax returns are showing that you earned £24k last year. The lender will want to see what you are earning NOW and that is where your bank statements will come in, these statements need to show a business income that supports the £24k you are saying you earned. They would need to show somewhere in the region of £2000 per month. For a builder or other self-employed worker, they can usually show this as their work goes on all year round. For you though, you may get paid all of your years income on the first 3 months of the year and then nothing for the rest of it.
Again, let’s assume that the affordability and income fits nicely too.
They will also look at your work and how sustainable it is.
Now this is where the Arts & Entertainment industry has some trouble.
Its never been known as a regular paying job and since that fateful 2020 year, its shown that things can take a turn for the worst at a moment’s notice.
The nature of the industry is that you get paid for what you do, and if you are working, then you are doing very well and can show income. If you are not working, you are not being paid!
Lenders and their underwriters aren’t stupid, nor are they unable to understand how your industry works but, they do need to show their workings, which are kept on file and to make sure these are all within the lenders criteria.
The lenders underwriters are working to a rule book, set up by the people who actually own the money that is being lent. This means if they need to go outside of these pre-set parameters, they need a pretty amazing reason to do so.
So, how do you actually get a mortgage when in the entertainment industry?
‘Mortgages For Actors’ www.mortgagesforactors.com - a specialist branch of H D Consultants, set up to specifically help these Arts and Entertainment industry - are the experts in this for a reason. This brand has put many entertainers, from Actors to Musicians to Belly Dancers in their forever home.
‘Mortgages For Actors’ Advisers are chosen for their experience in this industry and are able, using their industry knowledge and access to ‘decision makers’ at the heart of lenders, to talk to actual people, bypassing the whole ‘computer says no’ culture and instead, have a conversation to show to them, who you really are. Not just what your credentials are, but what kind of person you are – for example - proactive and willing to go job hunting straight away? Cautious with your money? Many of the things that you would put down to being a simple character attribute are actually things that can affect your mortgage decision positively.
What makes M4A even better though? There are no fees until you apply and by then, you have had a mortgage pretty much agreed! Research, time, correspondence and recommendations are all FOC.
When the time comes to apply for the mortgage though, you will have all the costs and figures laid out in front of you so you know where every penny goes with no hidden extras!
You can find a contact form on the main website www.mortgagesforactors.com or you can email directly at email@example.com
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