Why should I Choose Contractor Mortgages Made Easy?
We noticed the unfair reality for contractors trying to obtain mortgage funding, and decided to pioneer an alternative method. We have spent a considerable amount of time educating lenders to ensure contractors are no longer considered high risk. Due to this, bespoke underwriting agreements have been put in place with a number of lenders, where gross contract income and career experience is more important than remuneration structures. We have built relationships with decision makers within banks enabling us to get feedback regarding the likelihood of success for applications. This process means your application will not be declined due to your contractor status. We know how to present your circumstances to ensure you are not penalised for being a contractor.
Who provides mortgages for contractors?
Not every lender is contractor-friendly, however a growing number are. These include well known High Street names such as Lloyds Banking Group, Clydesdale Bank, Barclays, Nationwide, Virgin Money (previously known as Northern Rock), Natwest and numerous smaller building societies.
What is a contractor mortgage?
These products are no different to any other mortgage in terms of pricing with relevant lenders. The difference is how the lender will assess the application. Lenders will not look at traditional forms of income assessment but rather channel the application towards bespoke underwriting criteria specifically available for the contractor and freelancer community.
Do I qualify for a contractor mortgage?
Each application is assessed on an individual basis, but the broad criteria is as follows:
1) There must be a current contract in place
2) Continuity should be provable in the type of work being done
3) Borrowers new to contracting are acceptable
4) Income can be defined via annualised contract rate
Do you charge a fee?
We only charge a fee once we have successfully produced a full mortgage offer from a suitable lender having assessed all of your needs. Before this, we collate the necessary documents and provide you with an agreement in principle certificate. It is not until we have fully packaged your application for the lender and progressed it through full underwriting and obtained your mortgage offer that we charge a flat fee of £895. If your lender declines your application because of your contractor status and how we are proving your income, our fee is not payable.
How long does the application process take?
There are two phases. The first stage is pre-approval of your application. The second phase is the full application to the lender.
During the pre-application phase we request two pieces of documentation for the underwriters, we then get the information from them and feedback to you within 2 working days.
Phase two is when your offer has been accepted and you are ready to proceed with your application. The time it takes from application to the lender producing the full offer of funding will depend on the lender. The fastest can produce an offer within 2-3 weeks whereas some can take 7-8 weeks. We can advise you of the likely timescale for offer before you submit your application.
Am I penalised for being a contractor?
We don’t offer any dual pricing for being a contractor. We don’t deal with lenders that do that as it isn’t fair to penalise you. Clearly not all lenders are going to be best for your situation and circumstances, which is why we do the research for you upfront so we know who to approach to get the very best deal for you.
How does the process work?
Our process regarding your mortgage requirements begins with us needing 10 minutes of your time to discuss your plans and what you are looking to do. We will then talk you through our process, how it works and how we can utilise your gross contract income. There will be a couple of documents that we will need from you to go and do research on your behalf. We can then come back to you with some accurate feedback from the decision-makers at the banks regarding what options you have. From there, we can progress your application to an agreement in principle, and when you are ready to proceed, we can look at satisfying the conditions and move forward with the application.
What deposit do I need?
There is a common misconception in the marketplace amongst contractors that you will be penalised on the deposit. There are no hard and fast rules for contractors when it comes to the minimum deposit requirement with most lenders, you have potential to access the same as permanent employees. One thing to bear in mind with the deposit you are choosing to contribute, the more you are able to put down and contribute yourself, the better interest rate deals and product range you are going to have access to with lenders. It will also keep your monthly repayments lower as you are potentially borrowing less, and on a lower rate of interest.
How can you help when others have said no?
If a lender has said that they can’t help you obtain a mortgage, it could have been at one of two stages. A ‘no’ at the initial stage is common, when the adviser makes an enquiry with the underwriters. The other stage is when you have been fully underwritten by a lender. The latter is the higher risk scenario, but in both circumstances there may be an alternative approach. Every lender has different criteria to meet. A specialist broker understands you as a contractor, has good knowledge of the market place and can make sure the process of proving income is addressed in the right way. The first thing to understand is why you have been declined. If it is about proving your income to the satisfaction of a lender, this is something we can help with. We take a different approach and place you with a lender that does understand contractors and has a more flexible approach in their underwriting methods. Rather than asking for documentation from HMRC or from your accountant, we will be asking for your current contract and CV. This will show your annualised contract rate, your skills and experience; and will ensure that a lender can appreciate that you are a viable and a low risk case for lending.
How many years’ accounts do I need?
We often get asked if we will be able to help if you don’t have 2 or 3 years trading accounts. The reality is we are able to potentially assist if you have no trading history with your limited company. The way we get around this is by using a copy of your current contract and a copy of your CV to show your current earnings, and also your experience as a skilled professional. Using those documents, we are able to obtain mortgage funding successfully by avoiding any issues with affordability.
I’ve had bad credit in the past, is this a problem?
Every situation is different and it really depends on your own circumstances. There are options for people who have had credit issues in the past. If we get to the position where the underwriters say they can help, but not right now, at least we know that, and we haven’t damaged your credit profile by undertaking further credit checks, and more importantly we know what actions need to be taken in able to move forward with an application successfully in due course. There are a lot more credit options out there for people who have suffered credit problems in the past. Engage with us at the earliest point to ensure you understand your chances of obtaining funding as early as possible, and you have enough time to take any corrective action to maximise your chances of a successful application.