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Looking for a mortgage and you work as a contractor ?
We want to help
There are mortgage deals out there if you work as a contractor. Certainly it is more challenging compared to someone in a full time employed role.
Lenders might want you to provide accounts for the last few years, and prove that you have already secured ongoing contracts.
In some cases, contractors don’t need accounts or tax returns and can get approved for a mortgage based on their daily pay-rate if the tax & national insurance is deducted at source with payslips as proof of earnings.
1. Ensure your contract is up to date
Make sure you have a copy of your most recent contract to hand. It’s important to be able to show lenders not only how much income you have, but also how long you have remaining on your contract.
2. Avoid lengthy breaks between contracts
There are many perks to working as a contractor, not least being able to take breaks between contracts should you wish to. This is great for holidays or similar. However, you should try and avoid taking breaks of anything more than 6-8 weeks. This is because lenders ideally want to see consistent income and contracts stretching back 12-24 months prior to your mortgage application.
3. Be realistic about your repayments
A common mistake many professionals make when searching for a contractor mortgage is being unrealistic when it comes to estimating their repayments. It’s really important when we put your mortgage application together that you make sure the repayments you commit to are going to be affordable for you now and in thefuture.
4. Have at least a 10% deposit
Most lenders will require you to have a good-sized deposit when you apply for a contractor mortgage. Ideally, you should aim to have at least a 10% deposit ready to pay upfront.
Normally consists of:
Short or fixed-term employed contractors (who will usually need to show previous contracts)
It can vary from lender to lender
Contrary to popular belief, you don’t have to have years and years of accounts to be accepted for a mortgage as a contractor. You do need to show evidence of previous, current, and future contract agreements, however.
It’s a myth that you can’t get a mortgage as a contractor if you have less than 2 years of contracting history, too. As long as you can show a reliable income from your contract(s), and/or a history in the same line of work prior to contracting, you should be able to apply for a mortgage with us.
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