Lenders will work from your daily rate not from the accounts or tax calculation documentation
There can be barriers when looking to get a Contractor Mortgage, but with 80 UK mortgage lenders at our disposal, we can normally find a way to help whether you’re a first-time buyer or home mover with as little as a 5% deposit, or remortgaging your home, or looking for a buy-to-let mortgage.
The main considerations are to get a Contractor Mortgage:
- Occupation
There is no set list but we can help IT Programmers; Doctors; Medics; Locums; Dentists; Teachers; Engineers; Business Analysts; Telecom Consultants; Management Consultants; Oil & Gas , Operational Risk Management; Change Management; Marketing Consultants; Accountants; Actuaries; Architects; and Surveyors.
There are also more specific schemes for Construction Industry Workers (CIS). - Prior Sector Experience
If you have a background in the industry either on an employed or self-employer basis this can reduce time you need to demonstrate under a contract. Likewise if you are stepping directly from being employed with a firm to becoming a contractor with them. - Length of original contract
Three, six or twelve months contracts are common place. Most UK mortgage lenders look for twelve months contracting experience but there are those who will consider less. - Renewable contacts
The more times a rolling-contract has been renewed the more mortgage options you will have. - Close to end date
Mortgage Lenders need to demonstrate they are lending responsibly as such some will want three to six months remaining on the current contract. The devil is in the detail here as the mortgage process could itself take a while to go through. So three months at “application” is not the same as three months left at “completion” i.e. when you have the keys to the new house. Also when we you are inside the last 3 months it could be the Mortgage Lender ask for evidence it will be renewed / extended.
Contractor Mortgage – Contract Types
- Number of contracts. If you hold more than one contract arrangement most UK mortgage lenders are likely to see you as self-employed and look for accounts.
- Umbrella companies. Will often positon your income as commission or bonuses for accountancy purposes. Depending on the Mortgage Lender these components can still be used. If there is a charge for running the payroll then this will be deducted from usable income.
- Fixed term contracts. First time working on this basis is likely to need prior industry experience. If you have had a renewal then this is usually okay.
- Zero hour contracts. Most lenders need a 12 month track record.
- Daily / hourly rate contracts. Often these can attract more favourable calculations such as 46 weeks x 5 x daily rate when assessing affordability. There are also lenders that will use 48 weeks in their formula. Again detail is important here as some lenders have minimum qualifying incomes and limit the occupations.
Interest Rates
There are a large number of Mortgage Lenders in the contracting sector, including high street names, so the rates are very likely to be competitive.
Suitable Advice for Contractor Mortgage
Don’t just approach any Mortgage Broker of IFA that you stumble upon. The different between understanding the rules can result in completely different outcomes in terms of borrowing level, cost and success rates. Instead opt for the contractor mortgage experts at Niche Advice.
We will offer clear, impartial advice that bypasses the dated lending models who favour permanent employees.
What should I do next / Best place to start the journey?
Complete our short enquiry form, which will provide the basic information. Within the form, upload your current contact information and up-to-date CV with a list of your previous contracts and dates between them. If you are a CIS contract worker, please also provide your last three months’ payslips, and if you are on a zero-hour contract, let us know your total income in the last 12 months in the additional information box of the form.
