Contractor Mortgages

Whether you are looking to buy your first home or you are hoping to move house, if you are a contractor then you should prepare yourself for the difficulties that contractors face when applying for a mortgage. High street lenders are notorious for making the mortgage application process very hard for contractors. Some banks will decline without even the courtesy of having a conversation, there really is no personal touch when it comes to mortgage applications for contractors. The strict criteria that the banks apply for mortgage applications pretty much ensures that a large percentage of the applications will be declined.

Whether you are looking to buy your first home or you are hoping to move house, if you are a contractor then you should prepare yourself for the difficulties that contractors face when applying for a mortgage. High street lenders are notorious for making the mortgage application process very hard for contractors. Some banks will decline without even the courtesy of having a conversation, there really is no personal touch when it comes to mortgage applications for contractors. The strict criteria that the banks apply for mortgage applications pretty much ensures that a large percentage of the applications will be declined.

This seems like a rather unfair outcome, given the facts. By that we’re talking about facts like 15% of the employed population in the UK are self-employed (Office of National Statistics). Also, facts such as contractors earn more than the average salary in the UK (based on figures taken from Glassdoor). Of course, contractor salaries vary depending on the type of industry, contract agreed etc. but if they are earning higher salaries then surely it should be easier to get a mortgage? Unfortunately this is not the case.

High street lender will request long-term contract proof and a minimum 2 years of accounts. In the contractor world, this is not always possible. You can find yourself in a situation where you have a 12 month contract that is coming to and end and you can afford to take a month off before you start your next contract. So throughout the end of the contract and before you move onto your next one, you have absolutely no chance of getting a mortgage. This could be despite the fact that you have had a regular, steady income for the past 20 years!

If you’re looking to buy a house then you are going to find specialised contractor mortgages will save you a lot of time and frustration. This way you know you will be going with a company that understands exactly how the income is calculated and accounts are prepared for a contractor. They can often offer a mortgage amount based on your daily rate, so you are able to buy a house that is easily within your affordability range.

Don’t waste time talking to high street banks, talk to a specialised contract mortgage provider to find the best deal for your circumstances, where you are not penalised for your employment status.