If you are a contractor or a freelancer either self-employed or on fixed term contract - you may find that this makes things a bit complex when applying for a mortgage.
There are no specific mortgage products for contractors, you are able to access any products available in the market. However, from a lender’s perspective demonstrating the source of income, is reliable and will not leave you unable to keep up your payments, is where the difference and the challenge can be.
How is a Contractor’s Income Assessed
From a lender’s perspective, as a contractor you may fall into one of the following work patterns:
- Self Employed
- Fixed Term Contract – Both as PAYE or self -employed
- CIS Contractors
- Professional Contractors – IT Consultants, Locum Doctors, Teachers, Medical or Legal Professionals, Accountants.
As a self employed contractor, whether a sole trader or Limited Company Director, a lender will look at your self employed Tax Calculations and Tax Overviews. For professional contractors, lender may look at your daily rate and use this to establish your income, provided you have 12 months track record.
Depending on which category you fall into, every lender will have their own policy to establish eligibility for a contractor mortgage. This is where the knowledge of an experienced mortgage broker in this sector is vital to ensure the full amount required at a competitive rate is secured.
We have access to a wide selection of lenders who we can recommend for your needs. We therefore pride ourselves on searching for the most suitable mortgage for your needs whilst keeping the experience as smooth as possible.