Types of contractor mortgages:
- Self-employed contractors with a minimum 6-month contract
- Fixed-term contractors with prior industry experience
- Contractors working through an umbrella company, with a year's worth of experience
- Zero-hours contractors who can demonstrate a year’s worth of income
- Agency workers with a year’s worth of demonstrable experience
Which mortgage type is best suited to you depends on your circumstances, and our first step is assessing your needs to be able to advise on which lenders fit with your requirements.
Applying for a contractor mortgage
To successfully apply for a contractor mortgage, you will need to be able to show the details of the contract, and demonstrate your experience in the industry.
Mortgages for new contractors
If you are just starting out working as a contractor, it is still possible to secure mortgage finance, although most lenders will require your contract to be running for a minimum of 6-months. Being able to demonstrate experience and a good track record in a similar market is preferable. Give us a call today on 0330 304 3040 and we will be able to advise on how to build up a work history!
Mortgages for short-term contractors
There are mortgages available for contractors working on a short-term basis. Being able to show a sustainable income stream will help show the lender that the application is viable. If you need help putting together an application, creating a record of income history or deciding which product is right for you, get in touch with Revolution Finance Brokers today!
Deposits for contractor mortgages
Different lenders have different deposit requirements, and typically a 5% deposit is acceptable. The deposit value you have available will impact the interest rates lenders can offer, and the higher the deposit the more cost-effective the lending terms. However, ongoing affordability is a more key criterion. To understand which lenders offer products that match your circumstances, get in touch with our team and we will be delighted to advise.
Borrowing limits for contractor mortgages
The amount available to borrow through a mortgage is often calculated based on your day rate multiplied by the number of days you expect to work per week. This total is then worked out on 48-weeks per year to provide an anticipated annual income that lenders can base their offer against. Depending on the type of mortgage and your requirements, most lenders will look at around five times your annual income to arrive at a borrowing limit. Making sure you choose a lender who aligns with your business and your type of contract is essential to securing the best deal!
Right to Buy mortgages for contractors
Right to Buy mortgages are available to contractors as with applicants of any employment status. However, you will need to select a lender who accepts this kind of application since not all lenders can consider contractor Right to Buy lending. Your lender may require a personal deposit, but provided you choose a lender who offers this type of product, there is every possibility of securing a Right to Buy mortgage.
Buy to Let mortgages for contractors
Since Buy to Let mortgages are usually based on the available rental income of the property, your employment status does not affect your eligibility to apply. However, some lenders will request a minimum contract term left to run to ensure that the lending is affordable. Our specific lending calculators will help assess what you could borrow, and help identify the best lenders with the ideal Buy to Let mortgage options for you!
Help to Buy mortgages for contractors
The Help to Buy government scheme provides low-interest loans to assist buyers with property purchases and provide a suitable deposit. The scheme is open to contractors, so if you are looking to help in increasing your deposit, give us a call and we will help find the best lender for you, and advise on the pluses and negatives of the Help to Buy programme.
Shared ownership mortgages for contractors
A shared ownership mortgage for contractors is a specialist product, and will not be available through most mainstream lenders. There is no reason that you cannot obtain mortgage lending via shared ownership, but will need to consider niche lenders who can support this form of lending! Get in touch at [email protected] and we will work with you to find the specialist mortgage options to help you go ahead with your property purchase.
Contractor mortgages with bad credit ratings
Whilst you might be concerned about having a bad credit rating, you can still find a contractor mortgage for you. The best solutions will depend on the credit issues you have experienced, and our team can help work out the best route for your application.
Which lenders are the best for contractor mortgages?
Given the more variable income earned by most contractors, it is essential to choose a lender who is familiar with contract work and can consider your application. The property experts at Revolution Finance Brokers have years of experience working with contractor clients and will be able to deliver mortgage lending options suited to your needs.
Mortgages for agency workers
As an agency worker, you will need to be able to provide information about your income and agency work, such as a copy of your contract and a record of your experience in the industry. This helps specialist lenders understand your level of affordability, and assess the amount of lending they can extend. Whilst the application process may take slightly longer, with the right advice and the right lender you have every opportunity of securing mortgage lending!
Achieving the best mortgage rates for contractors
Applying to the best lenders means you can access the same competitive interest rates as any employee. If you have a strong deposit value, you will be able to secure an even better interest rate. Contractors have access to all the same types of mortgages as any other kind of worker and will need to choose between options such as fixed repayments, variable interest rates and tracker interest rates.
Advice for contractor mortgages
Here are Revolution Finance Brokers we pride ourselves on being to help clients in niche markets, specialist areas of work, and with varied income structures to help them achieve their property investment aspirations! We combine our experience with an outstanding network of lenders and specialist mortgage brokers providers to deliver the best mortgage rates for every client; no matter your sector or your circumstances.
