Banks REJECTING some mortgage applications from self-employed workers claiming vital SEISS grants

Banks are rejecting applications to provide some mortgages to self-employed workers who were forced to accept Government support during the pandemic.

Home-owner workers who have claimed for one or all of the Self-Employment Income Support Scheme (SEISS) grants are struggling to meet the affordability criteria put in place by lenders despite the end of most COVID restrictions this month.

Martin Lewis’ Money Saving Expert (MSE) website says: “While receiving a SEISS grant in the past isn't an automatic reason for mortgage rejection, sadly some have been told it is evidence of business viability problems (as by applying you declared you needed help) and have been rejected.”

According to MSE there may be some rest bite for those workers who received an early SEISS payment, instead of one the later grants. This may be enough to satisfy lenders of a change in financial circumstances.

For many the news leaves workers in a catch ‘twenty two’ position, with many relying on the funds whilst COVID restrictions have been put in place. Last week HMRC released the latest critical guidance for workers looking to claim their fifth and final SEISS grant.

HMRC will contact eligible workers from mid-July to give them a personal claim date. Eligible customers can apply anytime from their personal claim date until 30‌‌ September‌‌ 2021. The online claims service will open from late July.

The value of the fifth and final grant will be determined by how much the worker’s turnover has been reduced in the year 2020-21 compared to before the pandemic.

People whose turnover has fallen by 30% or more will continue to receive the full grant worth 80% of three months’ average trading profits, capped at £7,500. People whose turnover has fallen by less than 30% will receive a 30% grant, capped at £2,850.

Expert advice provided by MSE suggested that those struggling to get a mortgage should look into product transfers from current lenders, or try using mortgage brokers.