Specialist brokers can get contractors mortgages based on their contract value.
Most lenders don’t understand contractors when making contractor mortgage offers. They don’t know how they operate.
They should, as most of them employ heaps of contractors in their IT departments and other departments.
However, those at banks and building societies who are the ones who decide if contractors should get mortgages are not the same people who interact with contractors in their computer departments.
Contractors Risky to Lend To
From their point of view contractors are a big risk.
As they don’t have permanent (and secure) jobs they need to show a track record.
So, they ask to see 3 or more years worth of accounts.
Mortgage Offer Based on Director’s Salary
Now, what they are used to dealing with, when they make their mortgage offers, are salaries.
They then make an offer based on a multiple of a person’s salary.
They get the contractor’s accounts and peruse it for something they know.
“Ah, there it is” they think. “There’s the director’s salary. We will multiply that by 3 or 4 or 5 and make the contractor an offer based on that.”
The contractor would have been better to try to get a mortgage before he turned contractors.
Specialist Contractor Mortgage Brokers
However, in the past few years, specialist contractor mortgage brokers have managed to convince some lenders that the contractor market could be a lucrative one for them.
They convinced one or two lenders to give it a go and lend to a few contractors.
The results were good. The contractors paid their mortgages regularly and didn’t default.
So, they gave out more and more mortgages.
Daily Rate Annualised
They based these mortgage offers on the contractor’s daily rate annualised rather than their director’s salary.
They also only needed to see the contract as proof of earnings.
In the beginning the lenders were quite conservative when lending to contractors.
However, they gradually relaxed once they saw that contractors were actually quite good payers.
Despite the uncertainty of working as a contractor, they were able to organise themselves into making regular payments even when they were out of work.
More and More Mortgage Offers for Contractors
As a result, specialist contractor mortgage brokers are able to get more and more mortgages for contractors from more and more lenders.
What’s more, it is at high street rates or sometimes better.
Every so often they get a special mortgage offer just for contractors based on their contract value.
Contractors now have access to a growing number of lenders and a growing number of mortgage offers.
The process is pretty quick too.
You can normally get contractor mortgage offers on the very day you ask for one, providing you have all the details and could, potentially, be able to move into your dream house anywhere between 2 and 6 weeks after you sought the offer.
Applying for a Contractor Mortgage
To find out more, or to apply, just click on Contractor Mortgage Application and fill in the form there.