If you are a ‘Contractor’ you will generally struggle to find a mortgage with most conventional banks and building societies – The majority of mortgage lenders simply do not understand how you are paid and therefore can’t assess affordability etc and therefore will not any mortgage deals to this niche segment of the market.

There are of course lenders that will offer you a mortgage as long as you fit their individual criteria and each lender has a different stance on this – In fact, it would be fair to say that every lender has different criteria based on the term of the contract, your history in the sector, whether the contract has been renewed previously, if tax is deducted at source, some lenders may have a minimum income level that needs to be met and so on.

Definition of a contractor: An individual that undertakes to perform a job or a service, under contract, to a 3rd party.

As a contractor you will still get offered the same mortgage deals as a regular employed applicant, the only difference being that the choice of lenders may be slightly more limited. Mortgage deals will still be available as a first time buyer, home movers or if you are simply looking to re finance your existing mortgage with deals currently available up to 90% borrowing.

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How Much Will They Lend?

Lenders differ on how they view your income and therefore how much they will lend you as a contractor. Some lenders will simply apply a simple calculation of 46 X your weekly contracted amount to reach your annual income, others may look at your net profit after your deductions have been made and for this reason we would advise speaking to a mortgage broker who can determine which lender will be best for you based on your individual circumstances.

The most Common and acceptable Contractor Positions for mortgage lending:

  • I.T.
  • Accountancy
  • Oil & Gas professions
  • Compliance
  • Actuarial
  • Qualified Solicitors, professional engineers and Bankers

Do you fit the lenders criteria? Can you answer YES to the following scenarios?

  • Have you got a contracting history of 2 years? If No, are you experienced in the sector that you have a contract in?
  • Is your current contract for a minimum of 3 months or about to be renewed?
  • Is your contracting history without large gaps in between contracts, for example less than 6 weeks per year?

If you would like to discuss this further with one of our mortgage professionals who specialise in the contractor mortgage market please contact us now on 0845 6033 173

 

Each member of the team that I have had contact with have been very friendly and helpful. Damian Richards especially, instantly put me at ease and has answered any questions, keeping me up to date at all times. Likewise Karen has been very helpful with updates. I will most certainly recommend your company. (07/11/14)
MR JONES & MISS BARRETT

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