For contractors, getting a mortgage at a reasonable rate can be painful. For many years, it’s been a frustrating, time-consuming process. Contractor Mortgages® has changed that.
We specialise in arranging mortgages for UK contractors. Unlike traditional brokers, we never penalise you when it comes to sourcing a mortgage. The reason being, we’ve set out to make contractor mortgages our business.
A bold move, some may say. But it’s worked. We’ve become the preferred mortgage broker for thousands of self-employed UK workers. And that’s no surprise.
It was a team of ex-freelancers that created the Contractor Mortgages® brand. We all know how difficult securing competitive mortgage finance is when you:
- have an irregular source of income;
- a lack of trading history;
- receive payslips that don’t conform to the norm.
Regardless of how you’re employed, we guarantee to find you the best mortgage deal out there. And often with a mainstream lender, maybe even one you’ve approached direct yourself.
What’s more, it will be a competitive mortgage based on your contract rate, not your accounts.
We’ll make the entire process as simple and painless as possible. We’ll do the leg work; in fact, we’ve already done most of it. But we need to know a little bit more about you before we proceed. Here’s why.
How can Contractor Mortgages® secure a mortgage when I can’t?
We’ve negotiated realistic bespoke underwriting criteria with a growing number of high street lenders. These lenders are now willing to provide competitive mortgages to contractors.
It’s been a tough slog, but they now understand how to assess your relevant earnings. And this relevance is key to you accessing affordable finance using your contract rate.
How lenders appraise contractors has always been the problem. For too long, lenders have penalised independent workers in the mortgage application process.
It’s sad, but many contractors don’t even get to the mortgage offer stage. High Street advisors take one look at their accounts and reject them on the spot.
That’s because bank branch staff struggle to understand the contractor’s world. And these non-specialist brokers have broken the hearts of many of our referred clients.
Through their ignorance, an IFA has approached the wrong lender. Or an in-branch advisor has packaged the contractor’s application in an inappropriate way.
The result? The untrained advisor offers the contractor an exorbitant rate. Or there’s a frustrating refusal after going through the lengthy application process.
When your payment structure is a benefit, not a barrier
Does that painful process sound familiar? We’re betting it does. We know that many of you reading this will identify with that heartache.
Irrespective of your payment structure, we’ll find you a competitive mortgage. That’s whether you trade through your own limited company or a UK payroll umbrella firm.
The only documentation you’ll need to provide is:
- a signed copy of your contract;
- proof of id;
- your CV;
- 3 months’ bank statements.
How does that sound? Awesome? There’s more…
Your contract rate will be the basis of your mortgage amount, not pay slips or tax returns. In truth, the latter don’t give an accurate reflection of your disposable income in any case.
And this is the benefit of using your contract upon which to base your affordability. You’ll qualify for larger mortgages than if a lender used their typical affordability criteria.
It’s taken us a while to educate the banks and mutuals, but the groundwork is now paying off. Big time! Now it’s time for you to reap the rewards of our hard graft.
What should I do next?
We need to provide you with mortgage advice specific to your situation. Send us your contact details and let us call you back at a time that suits you. In the meantime, there are a few things you can do to prepare. Here’s the why and the wherefore to get the ball rolling.
Suppose you could spend just 30 minutes having an informal chat with one of our advisors. Imagine that chat culminated in a mortgage deal for you at least as good as any available to permies? Sometimes, our exclusive deals can trump even the best High Street mortgage offers.
Wishful thinking? Not a bit of it.
The keys to your new house are just that half-hour chat away. Knowing that you have an affordable mortgage is as important as securing a mortgage at all.
Think about that for just one minute: an affordable mortgage, well within budget. You could knock years off the mortgage term with an übercompetitive rate from the outset…
…and snap out of dream mode, now. Let’s make that dream a reality. Okay, next:
How to calculate your borrowing potential using your contract
As a rule of thumb, you can compute your typical borrowing potential as follows:
current contract day rate x number of days worked per week x 46 weeks per year x 4.5
Thus, at £500 per day for a five day work week, you may be eligible for a £517,500 mortgage
Contractor Mortgage Calculator
How much can I borrow on my daily rate?
Potential Borrowing = £
Is that all too much in one go? Okay. Let’s break it down.
Let’s say your contract earnings are a little more modest, say £300/day. You work a standard 5 days per week, 46 weeks per year. Multiply all those to give you your ‘annualised’ rate:
£300 x 5 (days) x 46 (weeks) = £69,000
This is, in effect, equal to a salary, which our lenders use for affordability purposes. Then you add the mortgage lender’s affordability factor, often 4.5:
£69,000 (annualised contract rate) x 4.5 (affordability factor) = £310,500.
That’s called contract-based underwriting. It’s how we work out that a contractor earning £300/day can afford a £310,500 mortgage. It is that simple and we’ve taught our mortgage lenders to see and approve this method.
What if I’m new to contracting?
It may be that you’ve not got certain key documents or evidence to support your income or history. You know that you can afford the mortgage, but you can’t prove it. Here are some of the potential barriers that may lead to such a scenario:
- you do not have two years of accounts;
- to minimise tax, you pay yourself a small salary, and the rest in dividends
- you’re on your very first contract;
- you’ve been contracting for less than a year;
- your accounts are not reflective of your current position;
- your existing contract is due to expire in the next 3 months;
- your income is irregular and difficult to prove.
Don’t turn away now if any of these are the case. Contractor Mortgages® are specialists in advising and arranging mortgages for contractors.
We’ve seen these all before and resolved them, to boot. That’s whether you have your own limited company, or are an umbrella employee.
We provide specific advice to first-time buyers, movers and remortgages alike. None of the above scenarios are foreign territory, let us assure you of that, at least.
Who can you secure mortgages for?
There’s no theoretical limit to the type of self-employed client we can help. Yes, some lenders are occupation-centric. But that’s why you need a broker with access to all types of contractor mortgages.
To give you an insight, here’s the makeup of our typical contractor client:
- IT Programmers;
- Business Analysts;
- Telecom Consultants;
- Management Consultants;
- Operational Risk Management;
- Change Management;
- Marketing Consultants;
- Oil & Gas;
That’s by no means a definitive list. It just gives you an idea of our flexibility. The mortgage market for independent professionals has changed. We’ve not only moved with it, we’ve had a hand in shaping it, too!
The Contractor Mortgages® difference: why you should care
Contractor Mortgages® are independent, FCA-accredited specialist mortgage brokers. We’ve achieved this status by building relationships with a whole host of lenders. Some you’ll know well, others maybe not so.
But what this means is that we immediately know which mortgage product is right for you. Of more importance to you, we also know where to get it at the most competitive rate.
We offer clear, impartial advice that bypasses the dated bias High Street lenders show. Their lending model is so stacked in favour of permanent employees, it’s scary.
The UK labour market has changed. Most High Street banks and building societies haven’t. They’re so wrapped in red tape, they’re static, or even going backwards.
We get it. We know that for tax reasons many contractors draw a low salary and restrict dividend drawings. These legitimate measures help avoid paying higher rate personal tax.
Instead of shying away from this advantage, contract-based underwriting leverages it. We can prove your affordability. Thus, we’ll secure the most competitive mortgages regardless of your payment structure.
Not just a one-trick pony
We don’t just offer run-of-the-mill mortgage finance. We can help limited company contractors in any housing situation, whether they’re ready to:
- make their first home purchase (first time buyers)
- trade up to a better home (second steppers)
- buy a second home as an investment (buy-to-let)
- refinance an existing mortgage (remortgage)
Whichever of those categories you fall into, we can help. Here’s a summary of the benefits you’ll get by using our service; we:
- secure bespoke “contractor friendly” underwriting terms with several high street lenders;
- provide you with a single point of contact for your mortgage application;
- work in a proactive, tireless way to affect your mortgage ASAP, often within 3-5 weeks;
- keep you up-to-date at every stage of your mortgage application;
- also provide the often overlooked income protection & critical illness coverage you need.
To get started, all you need to do is fill out our call back form. From there, one of our mortgage specialists will be in touch shortly.
In the meantime, get as much of the documentation together as possible, ready. We’ll have that chat and walk you through the rest. If you’re happy, we’ll start the ball rolling.
And that’s how we do contractor mortgages: simple, painless, within budget and on time. Your move.