With the advent of contractor mortgage products breaking further into the mainstream, finding a mortgage which doesn’t penalise contractors is a story less told.
In today’s contractor savvy markets, you should now be able to obtain a mortgage with little more than:
- A copy of your current contract including your contract rate attached should it be provided on a separate schedule
- Two forms of ID
- Three months personal bank statements
You may be required to provide up to 6 months of accounts (both business and personal) but this varies between lenders. Some contractor mortgage brokers have agreements with lenders to calculate their mortgages on your contract rate alone. The requirement of 3 years of accounts is now virtually long gone for many contractor mortgage products.
Problems are often faced when speaking with members of call staff who are not accustomed to the needs of contractors or their contractor products, as these are presumably less well known than their standard products. Contractors can be left going in circles attempting to share some understanding with a call centre script. For this reason many contractors have now turned to using mortgage brokers who specialise in the needs of contractors to hasten the transaction with less hassle and sometimes better deals. If seeking the services of a mortgage broker, be sure to check the fees involved as the broker fees that they charge can vary between brokers. Utilising a contractor mortgage broker is arguably the easiest way to obtain a mortgage and here is how it generally works:
- Your mortgage broker will arrange an AIP (Agreement in Principle) with the most suited mortgage lender. This is essentially a pre-agreement as to what they will lend you which gives you greater bargaining power when house hunting.
- Find the property you wish to purchase and agree on a final sale price.
- Start the mortgage application with your mortgage broker. You will also need a solicitor at this stage.
- The mortgage lender will conduct building surveys to decide whether they wish to lend on the property you have chosen. Serious issues may need to be rectified prior to a mortgage being agreed and will leave you with some bargaining to do with the seller.
- The mortgage lender will provide you with an offer, contracts will be signed, and you will need to make payment of your deposit. All of this will go through your solicitor. Remember that once paid, your deposit will be kept by the seller should you pull out of the purchase.
- After a completion date has been agree, your solicitor will arrange the transfer of funds and deeds, leaving you to simply move in.
Your mortgage broker will usually be on hand to assist through the entire process, although they suspiciously disappear when it comes to packing.
Essentially, obtaining a contractor mortgage should be no different to obtaining a standard one, nor should the rates be any different. You will simply need to locate the lenders which offer the best for your situation, or make use of a specialist broker who will do it for you.
Contractor Weekly have teamed up with mortgage specialist Freelancer Financials to offer you mortgage loans based on your contract rate alone and not just your taxable earnings.
To calculate how much you could borrow based on your contract rate, please complete our online enquiry form and someone will be in touch shortly.
For more information contact one of our mortgage specialists:
By email: firstname.lastname@example.org
By Phone: 020 8421 7999