Contractor Mortgages

Why did contractor mortgages come about?

Contractor Mortgages effectively came about when lenders realised that their traditional criteria for assessing a mortgage application would preclude a large number of contractors and freelancers from obtaining a mortgage.

What is a contractor mortgage?

A contractor mortgage is no different to any other mortgage in its pricing. The difference is how the lender will assess the application. Lenders will not look at traditional forms of assessment but channel the application towards bespoke underwriting criteria specifically available for the contractor and freelancer community.

Who provides mortgages for contractors?

Not every lender is happy to provide a contractor mortgage, however a growing number of lenders are. These include well known High Street names such as the Lloyds Banking Group, Barclays, Virgin Money (previously known as Northern Rock), Natwest and numerous smaller building societies.

What rate can I get?

The rate you can obtain on your mortgage is no different to the rates that are available to any other employed or self employed individuals. Prior to contractor mortgages being launched many contractors were reliant on self certified mortgages, where they paid a higher rate and fees. There is no need to rely on these avenues any more.

How is a contractor mortgage application assessed and how is this different to a “normal” mortgage?

A normal mortgage application will be assessed on the basis of your salary plus dividends and/or net profit if you run a limited company. If you are employed via an umbrella company then it will be your PAYE income. The issue with this traditional approach meant that many contractors could not borrow what they required. A contractor mortgage application however, is examined on the basis of your gross contract rate, with less emphasis on the mechanism you use to get paid.

Do I qualify for a contractor mortgage?

Each application is assessed on an individual basis, but the broad criteria is as follows:

• - There must be a current contract in place
• - Continuity should be provable in the type of work being done
• - Borrowers new to contracting are acceptable
• - Income can be defined via annualised contract rate

Why should I choose Contractor Mortgages Made Easy?

Contractor Mortgages Made Easy pioneered dialogue with lenders to explain that contractors should not be deemed a high risk for lending. This resulted in bespoke underwriting for contractors, where the gross contract income and career experience were deemed more relevant than the payment vehicle of the contractor. The advice given to our clients is completely impartial and we have access to the whole of the market. Furthermore, we have an agreed process with banks where we can extract feedback from decision makers, regarding the strength and likelihood of success of individual contractor applications. This will help avoid a failed mortgage application based upon earnings, as only relevant lenders providing positive feedback are considered. A failed application with another lender can hinder a potentially successful application elsewhere. We are all too familiar with this frustration and can position your situation with the lender so that they do not discriminate against you for being a contractor.