Ethical Mortgages

What documents do I need to provide for an ethical mortgage?

We’re making it clear here that it’s about the institution rather than the specific product. The mortgage process will be broadly the same. We need to prove your income, and whether you’re employed or self-employed, there’s different paths to do that. If you’re self-employed, we’ve got a great page on the website to look at.

You always need to provide bank statements to evidence affordability and what’s going out. We’ll do that in conjunction with your credit file, looking at ‘discretionary’ and fixed outgoings, because that will ultimately drive what you can borrow.

The more modest your outgoings, and if you have no debts, you’ll be at the top end of the potential borrowing – even up to seven times your income. If you’ve got children and debts, it might be less than four and a half times income. That’s why that affordability mix is so important.

If you’re buying, we need proof of the deposit. If you’re refinancing, it’s proof of the equity and the property value. Lastly, it’s the usual ID to prove your name and address.

Can I get an ethical Buy to Let mortgage?

You can, depending on your definition of ethical. We’d refer you to the GSG index as a good start, and also the B-Corp movement, because we believe it is a real force for good.

Some of the lenders we mentioned are really strong in the Buy to Let space. There are definitely options in that specific product from ethical institutions. Have a conversation with us – if you’re looking for a specific type of product, and it’s really important to you that the institution is ethical, we can hold your hand through that decision-making process.

What about an ethical remortgage?

Again, it’s all about the institution – I’m not going to repeat what we’ve already covered. We have a fantastic remortgage page on our website. So look there for the ins and outs of remortgage rules and criteria.

What we can then do is overlay your situation, goals and objectives to find the most relevant lender for you.

Can I get an ethical mortgage as someone who is self-employed?

Yes. There are lenders out there that score highly currently in that GSG index that are also very strong in the self-employed space.

We’ve actually seen a real improvement across the board, where lenders now consider different methodologies of being self-employed and different ways of evidencing your income.

There’s a lot more to get excited about as a self-employed person, and that can only be a good thing. Positive criteria shifts and improvements in affordability for the self-employed, alongside lenders working in a more ethical way, means we’ll end up with lots more options to choose from.

Can I still get an ethical mortgage if I have bad credit?

Again, it’s down to the institution. People have wildly different definitions of what bad credit looks like. Some people think bad credit is missing a credit card payment 10 years ago.

For others it’s bankruptcies, CCJs and defaults.

We start with your credit file and we can walk you through it. Your credit file is much like your driving licence – you might pick up some points, but they drop off after a period of time. On your credit file everything disappears after six years.

If you’ve kept all of your payments up to date in the last two years, you can probably use most of the high street lenders. Issues in the last three months, like late payments, might exclude the main high street lenders for you.

Within that range, it’s about what happened, why and how much it was for. Lenders are always interested in the reason and the monetary value. A classic example is when moving home, and a utility bill isn’t closed off. A small outstanding bill could give you a default or a CCJ. That’s not a big one – lenders accept it’s just an oversight, especially if it’s out of character for you.

If it’s more habitual, with consistent missed payments, or very high value or very recent, you could have issues. But you’d be surprised what some lenders will go for, and we have specialist lenders in this space. Whatever the situation, talk to us – nine times out of 10, people are surprised at how low the rates are, even down the specialist path.

What costs are involved with an ethical mortgage?

We mentioned that people are willing to pay more for an ethical mortgage, but that isn’t always required.

If you have a very specific requirement for a product or service, ordinarily we expect there to be a financial trade-off. But in this area it can be more accessible. Using ourselves as an example, a big part of our B-Corp accreditation is the fact that we don’t charge fees to our clients. We want to be accessible to more people – charging a fee potentially rules out some customers.

Extending that logic out to lenders, some take that same view. That can reduce some of those financial barriers. This is a growing area, and if the market continues to go this way, it would not surprise me to see those barriers come down.

What else do we need to know about ethical mortgages?

What’s hopefully clear is that as a broker, we have far greater research tools than the general public coming into this. We certainly know where to look.

Whenever I sit down with a client we look at what you want to achieve and how you want to do it. If an ethical mortgage is important to you, we can establish that on day one and only go to lenders that fit that criteria.

Outside of that, we’re here to make your life easy. We’ve got a system called Everglades, which we’ve built ourselves to smooth the onboarding journey and help with getting bank statements and pay slips etc. Access to your credit file is integrated into the system to make your life much easier.

Just to even buy a property these days, you have to be successful and doing well. So you focus on that, and we’ll focus on this. We do all the heavy lifting and keep you updated. We also get access to exclusive rates and direct access to underwriters, which makes a huge difference. That’s how we can get a better outcome than trying to do this yourself.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP WITH YOUR MORTGAGE REPAYMENTS.

THE FINANCIAL CONDUCT AUTHORITY DOES NOT REGULATE MOST BUY TO LET MORTGAGES.