Getting a mortgage as a contractor
The latest developments in the mortgage market have been particularly worrying for anyone looking to remortgage or buy their first home at the moment.
The “Mini-Budget” of 23rd September threw financial markets into turmoil. This led to a surge in mortgage rates and hundreds of mortgage products being pulled by lenders.
If you are a contractor, the current market conditions come on top of the existing challenge that many high-street mortgage providers may be reluctant to lend to contractors. The reason for this is that defining your source and level of income can be difficult, as it isn’t as black and white as someone on a standard annual salary.
Now for the good news…
So, that’s the bad news over with! There is good news though. Getting a mortgage as a contractor is far from impossible; there are a number of specialist contractor mortgage providers who will take your individual circumstances into account.
Some will use your daily rate to calculate the amount you can borrow, while others look at your average earnings over a number of years.
Get off to a strong start
If you are a first-time buyer or considering re-mortgaging, there are some steps you can take to make sure your application gets off to a strong start:
1. Get your paperwork in order
Make you have your income documentation ready to support your application. This includes contracts, remittance slips, latest P60, ID and proof of address. Your mortgage advisor or broker will be able to give you a full list of what is required.
2. Shape up your credit score
Get visibility of your credit score before lenders do, so you can flag up and deal with any potential problems.You can download your credit file from a credit reference agency like Experian, and ask for any incorrect information to be removed or amended before you apply for a mortgage.
3. Get the right advice
Speak to an experienced advisor who specialises in securing mortgages for contractors. A specialist in this area will save you the frustration of trying to explain how you work and your income as a contractor.
Free mortgage advice for Liquid Friday contractors
One of the benefits of contracting through Liquid Friday is that you have access to free, independent mortgage advice.
Our experienced mortgage expert Matt Lay, CeMAP, works with a network of lenders who fully grasp the nuances of contractor income.
This service is completely free and there’s no obligation, so why not have a chat? Click here to request a call back from Matt.