Offset Mortgages for Contractors
Offset Mortgages for contractors are now available to UK contractors in a fantastic new deal that specialist contractor mortgages broker, Tony Harris, has negotiated with a contractor friendly lender.
Tony created the specialist contractor mortgages market by getting lenders to take a chance and loan money to contractors. Lenders used to demand three years worth of accounts from contractors. They based the offer on a multiple of the contractor’s Director’s salary. So, that wasn’t much good.
Specialist Contractor Mortgages
However, Tony changed all that. Lenders dipped their toes in the water first to see if contractors would pay up. They made offers to them based on their daily rate annualised. They accepted production of their contract rather than three years worth of accounts.
It worked because of demand from contractors.
Now for Offset Mortgages for Contractors
Contractors, in the main, kept up their payments and didn’t default. So, this gave Tony greater credibility in the contractor mortgages market. Lenders are offering him better and better deals for contractors.
Therefore, they have negotiated a contract based underwriting deal with one lender for offset mortgages for contractors which is available only to them.
It is fixed rate offset mortgages for contractors. Tony has access to products only available to him.
Offset Mortgages for Contractors Key Features
Key features of the exclusive Leeds Offset Mortgages for contractors:
– 5 year fixed from 3.89% on a 75% loan to value (LTV)
– 3 year fixed rate from 3.49% on 80% LTV
– 2 year fixed rate from 3.19% on an 85% LTV
– £199 booking fee payable to Lender on application
– £1300 or £800 completion fee which can be added to the loan amount
– Available on loans of up to £500,000
Exclusive Offset Mortgages Deal
So, Tony is exceptionally proud to announce that, after lengthy negotiations, a new Lender is to open up their product range to include contract based underwriting.
To calculate, therefore, the annualised contract rate that the new Lender will use simply work out:-
Your day rate x 5 days per week x 46 weeks per year = your annualised contract rate x up to 5 times depending on your circumstances.
Flexible Offset Mortgages for Contractors
Flexibility is key for Contractors and as such, there is a growing demand for offset mortgages for contractors. The new Lender has answered this call with their extensive range of Offset Mortgages for Contractors.
The range of two, three and five-year fixed rate products allow Contractors to ride out any interest rate increases over the next few years, as the Bank of England is predicted to revise the base rate from its current low of 0.5% next year.
What are Offset Mortgages for Contractors?
What is an Offset Mortgage for Contractors?
An offset mortgage for contractors is a fully flexible scheme where credit balances held in separate savings accounts are deemed to have been paid off of the mortgage.
This reduces the total on which you pay interest. That is, if you have a £100,000 mortgage and £10,000 in your savings account you’ll only pay interest on a £90,000 mortgage).
You still have access to your savings whenever you want. There’s no cap on the amount you can withdraw or deposit in your savings account.
Most mortgage products have early redemption charges if you try to reduce your mortgage by more than 10% per year.
These are often too restrictive for contractors who could pay down a substantial chunk of their mortgage when they are in a good contract or at the end of their business year when they can take a large dividend.
With specialist offset mortgages for contractors, there are no penalties as you don’t actually pay off a large chunk of capital. You simply benefit from the reduced interest on your mortgage by holding your contract earnings in a linked account.
That’s very neat, isn’t it?
Offset Contractor Mortgages
How does an Offset Contractor Mortgage work?
An offset mortgage for contractors can either be set up on a payment or term reduction basis. With term reduction you maintain the same monthly payments to the lender as would be due without the credit offsets.
This would have the net result of making a greater capital repayment than would have otherwise been the case. This is because less of each months repayment is needed to pay the interest Therefore more can be allocated to the capital repayment.
This overpayment can have a significant impact on reducing your mortgage term so Tony tends to advise contractors to take this route.
Reduced Monthly Payments
Alternatively you can accept that you make no additional capital repayment each month but instead enjoy a reduced monthly payment to the lender by virtue of the reduction in interest due each month.
The danger of this route is that because you are not making capital repayments on the original loan amount, if your offset credit balance is then required and withdrawn at some stage during the mortgage term, you would still have a substantial debt to begin paying off.
This is because of having made no capital repayments on this sum throughout the period that the moneys were offset.
Fees free and free valuation
The maximum loan size is £500k and Tony has negotiated a free standard valuation up to £560. The interest on your mortgage will be calculated daily so you will benefit from an immediate reduction when you increase the balance of your savings and current accounts.
Tony can secure you an agreement in principle with this new Lender within an hour of your initial call.
So, to find out more about offset mortgages for contractor or apply you should click on Specialist Contractor Mortgages