Contractor Mortgage

Being a contractor can offer you flexibility and independence, but also uncertainty when it comes to buying a home. But as the number of freelancers and independent contractors in the UK increases, many mortgage lenders could be willing to lend to you, even if your income jumps around.

As mortgage brokers, we will first work out how much a lender would potentially allow you to borrow – this is known as an affordability assessment. We look at how much you generally earn, what your expense’s are and how secure your income is. Even if you are paid on a ‘day rate’, we will be able to assess your affordability and research the market for the perfect mortgage.

When lenders assess a contractor mortgage, they will want to verify income by seeing 2-3 years’ worth of accounts or tax returns. Lenders have not kept up with changes in the labour market, and their criteria fails to accommodate for the growing ranks of independent professionals.

Umbrella company contractors will find that many of their expenses will not be considered when calculating income. Limited company contractors will experience a similar problem, as any money retained in the company, for tax purposes, will not be considered. 

Let us say you are able to overcome this first problem, you will then face another challenge. generally, banks and building societies only lend to those who are considered low risk, and contractors just do not tend to fall into this category. The reason being is that lenders worry that these individuals will struggle to afford their monthly payments when their current contract comes to an end.

Talking to a professional mortgage adviser will ensure that all these challenges are factored into your affordability and criteria assessment therefore giving you a better possibility of obtaining a contractor mortgage, (with our qualified affiliated companies).

Your home may be repossessed if you do not keep up your repayments on your mortgage or any others debts secured on it.