Q. I work in the public service sector and have no choice but to join an Umbrella company. Can I still get a mortgage based on my contract rate or will I be assessed on my payrol salary which is pathetic. I’ve already contacted my existing lender HSBC and they didn’t have a clue? They got confused when I tried to explain that I’m a contractor looking to go from a PSC to Umbrella. They didn’t even understand what an Umbrella company was!
A. The simple answer to your question is YES, you can still get a mortgage based on your contract rate irrespective of whether you operate through your own Limited company or an Umbrella. As long as the Umbrella company that you choose doesn’t operate a “Loan Trust Scheme”. You will typically experience problems if you go to lenders directly or a mortgage broker that doesn’t understand how contractors work. They’re typically geared-up towards salaried employees. This is why it is always important to use a specialist contractor mortgage broker.
Even if you you’re fortunate enough to pass the first hurdle and get your mortgage application looked at by an underwriter, issues often arise when they analyse your payslips as they’re typically weighted towards commission, bonuses and expenses.
The other problem you face by going direct to a lender is that your new umbrella status doesn’t show sufficient earnings history. Most Lenders want to take comfort from a history of earnings.
At Freelancer Financials we have excellent relationship with contractor friendly Lenders and Building Societies. We can assist you to package your mortgage application so that your earnings are assessed and calculated based on your gross contract earnings alone, avoiding the need to use accounts or payslips. You can check how much you can potentially borrow by using our Contractor Mortgage Calculator.
To find out more, contact Freelancer Financials, they will be able to assist you.
For further information visit the Contractor Mortgages page.