Contractor Mortgages
At SAM Mortgages, we understand that being a contractor means freedom and flexibility, but it does mean that getting a mortgage may be a little more involved. This is where we come in. Our expertise will ensure that lenders are able to understand and recognise your contract income, to help you secure the right mortgage for you.
Your home may be repossessed if you do not keep up with repayments on your mortgage.
Depending on your circumstances, there may be a charge for mortgage advice. The amount varies according to your circumstances and can be charged at up to 1%. The standard fee is on average 0.3% of the amount you are borrowing.
What is a Contractor Mortgage?
A contractor mortgage is focused on people who receive their pay from short or long-term contracts, rather than from permanent salaried employment. Contractor mortgages, unlike standard mortgages, take into account basic pay slips.
The contractor’s contract rate, as well as any history of work, and going forward, their potential earnings for the future.
This enables contractors, no matter their industry (IT, construction, etc.), to gain access to mortgage products that value the real worth of their income.
How Do Contractor Mortgages Work?
Unlike traditional employment that is secured via payslips, mortgages which cater to contractors will consider a different basis of affordability assessment. Affordability may be assessed based on:
- Your contracted daily or hourly rate multiplied by a given time frame (such as 48 weeks in the year).
- The length and continuity of your current and previous contracts.
- Your sector experience and the probability of securing future contracts.
This means, even though your income may fluctuate, you will be able to show lenders that you are financially secure and a responsible borrower.
What Are The Contractor Mortgage Requirements?
To qualify, lenders will usually ask for the following:
Which Documents Do Contractors Need to Provide?
During the application process, you will be required to provide:
By preparing this information in advance, you should make your application easier and help to avoid any unnecessary delays.
Improving Your Chances of Successful Underwriting
There are also a few steps you can take to strengthen your application:
Good and full records – Use organised contracts and accounts to show reliability.
Good credit score – Pay bills on time and manage debt well.
Longer contracts – Lenders often prefer evidence of longevity/stability.
Larger deposit – Owning a larger amount of equity in the home strengthens the mortgage application.
Confidently Navigating Contractor Mortgages
At SAM Mortgages, we only deal with contractors from across all sectors. Whether it is through a Limited company, umbrella company or sole trader, we will find the right lender and product that meets your individual scenario.
We think that contracting should not impede your aspirations of home ownership. Through our expertise, network, and personalised advice, we will make the process simpler and enable you to move forward with assurance.
– Call us today on 01604 261685, or utilise the online appointment request to start your contractor mortgage journey.
Frequently Asked Questions
Do I need contracting experience before applying?
Can I apply if I work through an umbrella company?
How do lenders work out affordability?
Will I pay higher rates as a contractor?
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How Much Do You Need?
Use our mortgage calculator to give you a guide of how much you could borrow and what deposit you may be required to pay. This is a tool to give you an indication only – speaking to an experienced adviser will give you a clearer path.
