Looking for a Contractor Mortgage?
As a contractor or freelancer, you may have had problems trying to arrange a mortgage. It can be difficult securing a contractor mortgage because many lenders and brokers simply don’t understand your unique working status.
How I can help arrange a Contractor Mortgage
It is possible to arrange a mortgage based on your contract rate alone which means your mortgage would be arranged on your behalf based on the value of your contract, rather than your self-employed net profit or salary and dividends, when calculating your affordability and eligibility for the borrowing.
Construction Industry Scheme (CIS)
Are you self-employed contractor paid through the Construction Industry Scheme (CIS)? It is possible that a mortgage can be arranged based on an average of your weekly/monthly pay, typically over a three to six-month period. Which means there might be no need to provide your net profit.
I am able to provide ‘whole of market’ advice to find you the best contractor mortgage deal possible. To find out how much you could borrow, based on your contract rate or average pay through the ‘CIS’ scheme, call me on 01425 291066 or click here for further contact information.
Tips for securing a Contractor Mortgage
Use an independent mortgage adviser who understands contractor mortgages and the complexities of this type of application. Avoid branch or call centre staff who are not trained to deal with your specific situation; speak instead to a specialist who understands your contractor status who can make sure that your mortgage application is positioned correctly.
Aim for at least 10% deposit, but be aware that the best rates available go to those people who have a deposit of between 10% to 25%. If you do not have this amount of deposit or if you don’t have equity in your current property, then there are still contractor mortgages out there – but you will pay a higher rate. The more ‘equity’ that you can put into a new property, the less risk the lender is taking on, and so they can offer lower rates.
Keep a good credit rating. Despite a good income and a sizeable deposit, you could still have a contractor mortgage application declined if your credit rating is not good. It is vital to keep your credit rating as ‘clean’ as possible.
Make sure your contract is up to date. You will need to have a copy of your signed contract to hand. This must clearly state the length of your contract, and your current contract rate.
If you are a contractor paid through the Construction Industry Scheme (CIS) ensure you have at least three to six months pay slips readily available.
Make sure your repayments are going to be affordable. It’s vital that you are realistic about what mortgage repayment you can afford to pay each month. The figure that a lender is willing to offer you, based on a multiple of your contract rate, could result in higher repayment figures than you can actually afford, based on other financial commitments you have. So be sensible. It is also important to realise that interest rates can go up, and if you’re on a variable rate then repayments could cease to be affordable.