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Mortgages for UK Contractors made easy

With January just around the corner, now is the ideal time to start thinking ahead and planning for 2018. It is important that you review where you are currently on the journey to your contracting goals and set up your main objectives for the future.  This should include wider financial plans for 2018 which may entail getting on the property ladder, re-mortgaging your home or even getting a buy-to-let mortgage.


Of course, taking out a mortgage is a big financial commitment so you will want to make sure you are ready for this next step and find a mortgage provider who helps you secure the best deal.


It’s a common misconception that those who are self-employed, freelancing or contracting will have a hard time getting a mortgage at competitive rates. In fact, there are a wide range of specialist companies that are trained to help secure a mortgage for contractors in the UK, at the best possible rate.


Are you a first time or long-term contractor?

As contracting continues to increase in popularity, today’s lenders have become more understanding and responsive to the way contractors work.


And, unlike many high street banks and building societies that will ask you to present at least 3 years of accounts when applying for a mortgage, there are now a number of specialist lenders that accommodate the bespoke needs of first-time UK contractors looking for a mortgage.


Of course, there are also plenty of options for long-term contractors too. So whether you are investing in a buy-to-let property or you’re looking to re-mortgage an existing property, you will be able to secure the best mortgage deal, subject to meeting lender’s requirements.


How much can you borrow?

Thanks to an influx of lenders prepared to offer the same market rates to contractors as to those in permanent work, securing a mortgage as a contractor is easier than ever before.


Lenders determine the amount of money they are prepared to let a contractor borrow based on an annualised multiple of the contractor’s daily contract rate, so you won’t have to worry about producing accounts from the past 5 years.


Of course, rates will also depend on a number of other factors including your annual income, your deposit amount, borrowing period and whether or not you are a first time buyer.


Deposit size

If you’re applying for a mortgage as a contractor, like most prospective buyers, you will be expected to put down a deposit. However, this amount will depend on a number of different qualifying and lending criteria.


You should be aware that this criteria is constantly changing in response to changing lender presences and varying market conditions. As a general rule of thumb you would normally contribute around 10 to 20%, but this can be increased in order to get the most competitive deal. So if you are planning on purchasing a property that is worth approximately £500,000, you will be expected to put down a deposit in excess of £100,000.


Of course, a major deciding factor when it comes to working out deposits and loan to value is your credit rating. For example, if you continuously miss credit card payments or you have a bad credit history, you will be classified as being high risk, which means deposits tend to be higher for those individuals placed within this category.


Before applying for any loan or mortgage, it’s always worthwhile checking out your credit rating to avoid disappointment.


Best contractor mortgages available

When it comes to securing the best contractor mortgage deal, it certainly pays to speak directly to a specialist financial adviser who is experienced in helping new and long-term contractors to secure the best possible rate and deal.


And once you have spoken to a specialist financial advisor and secured and initial mortgage agreement, the application process is relatively quick. A number of different credit checks will be completed in order to prove your income and identity. You will then be expected to provide the following documents:


  • Proof of address
  • An updated CV
  • Proof of ID
  • Address any unusual activity on your account
  • Provide deposit fund evidence
  • Provide three months or more of limited company business and personal bank account statements


Once this data has been received and processed, the lender will then finalise your mortgage offer and let you know.


Now for the fun part… once the money has been agreed with your lender and your financial advisor is confident that you are getting the best possible deal, you will then be able to hunt for the perfect property.


If you are a first-time buyer, you will be able to benefit from recent Budget changes and the new 0% rate of Stamp Duty for the first £300,000 spent on a property up to the value of £500,000.


Contractor mortgages made easy

Contracting Scout provide access to a wide range of umbrella, accountancy, financial and job scouting services and we are able to discuss your options when it comes to deciding on the best contractor mortgage rates for you.


The Scout team is always on hand to answer any of your questions or point you in the right direction to find the information that you need.


Over the years, we have forged strong relationships with a number of different lenders and contractor friendly mortgage brokers who have the knowledge and expertise to guide contractors looking for a mortgage through every stage of the process, ensuring that they get the very best deal – with minimum time, stress and hassle associated with arranging a mortgage.


So if you’re looking for more insights about how to get a mortgage for a contractor or you are looking to find out more about mortgage rules for contractors, give us a call today.


Contracting Scout is not authorised to offer regulated mortgage advice and are introducers to authorised mortgage brokers. 
Your home may be repossessed if you do not keep up repayments on your mortgage.


If you require additional information regarding mortgages please get in touch with us to get the process started and an introduction made.

Find out more about mortgages rates and deals for contractors

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