Securing a mortgage as a contractor isn’t easy if you go it alone, therefore we have put together some top tips to help you on your way.
We can help you avoid the stress associated with obtaining a mortgage in a difficult lending climate. Please remember lenders are taking a very cautious approach at present and are only looking to take on what they perceive to be “good risks” in terms of borrowers.
Use a specialist broker
The truth is that most lenders have little understanding about the contracting market, and as a result their standardised procedures do not accommodate contractors. We have agreed bespoke underwriting agreements with a comprehensive range of lenders enabling us to secure mortgage funding based on a multiple of your contract rate alone.
Know your minimum deposit
The minimum deposit needed for a mortgage is 5%. Lenders tend to favour individuals who have higher deposits, but this is true to anyone looking for a mortgage and not just contractors. To access the most competitive rates you should be aiming to save anything between 10 and 25%. There are mortgage options out there for less than that, but they will be on a much higher rate.
Maintain a spotless credit rating
Lenders have become increasingly risk conscious and are continually on the lookout for reasons not to lend. A good deposit and a satisfactory income is often not enough to secure a mortgage. That is why it is essential to keep your credit rating up to scratch, leaving the lender no reason to turn you down.
Update all relevant paperwork
You will need to provide minimal documentation to support your application. Ensure your CV is up to date as it will be used to prove your skills and experience. You will also need to obtain a copy of your current contract as this will be used to demonstrate your earnings. Using both of these documents we can avoid any issues to do with affordability.
Use your mortgage advisor to get an offer
When you are presented with your Agreement in Principle it is important to use it for your own reference rather than for the Estate Agents. When making an offer that is not the full amount we recommend contacting us to amend the figure on your certificate to match the offer, this way you are not revealing your negotiating position. If an estate agent knows how much you can afford they may attempt to secure a higher offer on behalf of the vendor.