A contractor mortgage broker is a financial advisor that helps with giving individuals who are self-employed or work under temporary contracts to be able to secure a mortgage. Deciding on a contractor mortgage becomes complicated as you need to consider the admin of the rates, terms, your provider, your insurance, these can be time-consuming and quite complex.
So how do lenders define a contract worker? This depends on each mortgage provider. You could be a contractor that works on a fixed-term contract or a self-employed person working through a certain company. Understand that not all lenders will be happy to give out a mortgage to a contract worker due to the high risk of them not being able to pay all their installments
It is important to consider seeking advice from a broker who specialises in this type of lending. You will receive detailed advice on what mortgage would be best suited for you and your current income.
When making an application as a contractor for a mortgage consideration, a credit check will be required with your recent credit score and an upfront deposit which may be more than with a permanent employment. Other factors may influence your application include your income, age, and property type that you intend to buy. Your lender might also want additional details about your contract job. to consider your application, these factors may include questions such as:
Keep a copy of your most recent contract so that you can provide it to your lenders upon request.
Try not to have long breaks that are more than 6-8 weeks between your contracts. Lenders want to see that there is consistent income for you to consider you a mortgage.
When calculating your mortgage repayments ensure you choose a deal that you will afford to repay.
When you apply for your contractor mortgage, most lenders require a deposit, at least a 10% deposit should be good enough and ready to pay upfront.
You should try to find a mortgage that allows you to pay chunks off in addition to your regular monthly repayments. This will enable you to take maximum advantage of your position and pay-off more of your mortgage quicker.
Having a good credit score and having three or more years working as a contractor will easily get you the best rates. The choices of contractor lenders are limited. Find a broker tailored for you. And get a quote today.