Contractor Mortgages

Historically, mortgage companies have been reluctant to lend to consultants, surveyors, engineers, business analysts and other contracting professionals, deeming them to be ‘high risk’ due to the nature of their work. Thankfully, the tides are now changing.

More providers are beginning to understand the plight of the independent worker and are ready to open their doors to self-employed applicants. Annualised contract rates are now widely used as a means of assessing mortgage affordability, and this level of standardisation within the mortgage industry has been a lifeline for contractors, who are either looking to buy a property for the first time or remortgage their existing home.

How much can a contractor borrow?

This is the first question we get asked; how much can a contractor borrow based on income. To clarify the situation, there are a number of factors which lenders will take into consideration:

  • Track record
  • Expenses
  • Contract renewals
  • Experience

We know from our own experience that it is vital to approach the right lenders for your specific situation. It is also paramount that your finances are presented in the most advantageous light to secure mortgage finance.

If your income patterns are irregular or you have only been contracting for a short period of time, you may however struggle to find the right deal. But, our team are at hand to help you find a contractor mortgage that offers affordable interest rates and favourable terms, regardless of your working circumstances.

We have access to a broad range of lenders who can offer great deals for contractors in all kinds of professions. What’s more, we also liaise with third parties and complete all paperwork on your behalf, leaving you to carry on with your working day safe in the knowledge that your mortgage or remortgage is well in hand.

More than half of our clients are self-employed, so not only are we up to speed with the latest market trends and offerings but we can work on extremely short timescales.

Contact the contractor mortgage desk for a no obligation chat today.

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Getting a mortgage FAQs

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What is a Mortgage?

A mortgage is a loan from a bank or building society that enables you to purchase property. The loan is repaid with interest over a number of years, with the term for doing this dependent on your personal financial circumstances.

A mortgage can be held by an individual or jointly between one or more people, but if you do not keep up your repayments, your home could be repossessed by the lender.

Will i be accepted for a Mortgage?

All mortgage lenders have their own criteria. The following factors all play a part in determining their mortgage offer and how much they are willing to lend to you:

  • Amount you wish to borrow
  • Size of your deposit
  • Employment status and income
  • Credit rating
  • Outgoings
  • Existing debt
  • Your age
  • Length of the mortgage term
  • Your credit status
  • If you are applying solely or jointly

In order to be accepted, you need to convince lenders that you are able to repay your mortgage. To do this, lenders typically use your credit report to check your repayment history. Your credit file will contain current and existing records on items such as credit cards, loans, overdrafts, mortgages, mobile phone/s, some utilities payments and all accounts opened in the past six years. If you have had arrears, defaults, CCJs, debt management plans or previously been made bankrupt, there are mortgage options available which we can help you with.

How does the Mortgage application process work?

To get a mortgage, you will need to save a deposit of at least 5%. However, the more you can save, the better your rate will usually be. If you already own your own home, you can use the equity in your property for this. Our expert mortgage advisors can talk you through the benefits and the difference in your monthly payments by increasing your deposit.

 Once you have found the property you want to buy, our mortgage brokers will assess your personal needs and circumstances and recommend a mortgage product that is right for you. They will compare hundreds of mortgage quotes, including a number of exclusive products that cannot be found on the high street or comparison sites, and ensure that you get the right deal at a great price.

 If you are happy with the mortgage product your advisor recommends, you will then receive an Agreement in Principle (AIP). This will give you an approximate sum of how much the lender is willing to let you borrow, and enable you to put an offer in on your dream home.

 If your offer is accepted, you will need to appoint a solicitor to handle searches, surveys and contracts, which we can arrange for you. We handle the entire mortgage application process through to completion, liaising with your solicitor and lender to ensure that your application is a success.

 If you are looking to remortgage, then we recommend looking for a new mortgage deal around 3 months before your current deal expires. Starting early will give you plenty of time to compare all the available mortgage products and submit your application. If your mortgage is approved early there’s no need to panic, as we will ensure that the completion date corresponds with your current deal’s end date.

How much can I afford to borrow?

Most mortgage lenders will lend you up to five times your salary. However, this is dependent on a number of factors including your age, number of dependants and current financial commitments. Lenders generally work out how much they will lend you based on what you can realistically afford each month after you have paid your bills, credit cards, loans etc.

Our Mortgage Broker can help you understand how much you can realistically borrow before an application or credit search is completed, by assessing your individual needs and circumstances. If you choose to proceed with an application, then our advisers will know which mortgage lenders to approach to ensure you get the required loan amount.

How much deposit will I need?

To buy a home with a mortgage, you will need to save a deposit of at least 5%. The more you can save, the better your mortgage rate will be. There are a few exceptions to this however as follows: 

  • If you already own a home, you can use the equity from your property for the deposit
  • If you are a council tenant and are looking to buy your current home under the Right to Buy scheme, most mortgage lenders will now accept your Right to Buy discount as a deposit.

With property prices increasing, first time buyers are struggling to save enough money to buy a home. The government has therefore introduced ‘Help to Buy’ to enable first time buyers to get on the property ladder.

Our professional mortgage advisors are experts on all the various mortgage deals available and can help you decide which mortgage deal best fits your needs

Can i get a mortgage with bad credit?

If you have a history of bad credit including; arrears, defaults, county court judgements (CCJs), debt management plans or bankruptcy, there are still mortgage options available. Your choice of mortgage lender and type of mortgage will however be limited, and the rate of interest will be higher than someone who has a good credit rating.

Our expert mortgage brokers are in regular contact with adverse mortgage lenders and are well placed to advise you on all your available options.

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