Mortgages for Contractors

A contractor mortgage is only different from a mainstream mortgage in terms of how a lender will assess your eligibility for a loan. The underwriter will bypass traditional means of assessment and will adhere to a specialist criteria in order to assess your needs on an individual basis.

Lenders have tightened their criteria over the past few years following the credit crunch. As a result contractors have faced a struggle trying to source a loan or mortgage. Contractor mortgages have previously fallen outside the bank and building societies strict lending criteria as many lenders see it as a grey area. Previously lenders have been concerned by contractors not being able to supply consistent payslips, or where accounts don’t reflect true income.

With ams: you can overcome these issues and find the right mortgage available for you. There are lenders with whom these requirements are not always essential, some lenders will work on the value of the contract rather than your net profit, or salary and dividends when calculating eligibility. Lenders have now realised that contractors can be safe borrowers with a stable income. So in essence…getting a mortgage is possible if you are a contractor.

Not at all.  Where technically you are self-employed and most lenders will want you to provide these for proof of income, there are lenders which may use gross earnings based on their calculation of your current day rate.

For example

Day rate x 5 x 48 = £ Income

This will definitely increase your affordability to those lenders who will use your income from self-employment for maximum loan calculations. Though if you are not an IT contractor there could be some minimum income criteria so it is essential you get the right advice

Potentially yes. Some lenders allow some time off between contracts, continuous history is preferable but not always essential. It all depends on the lender’s criteria for your particular contract type and your circumstances and getting it right first time.

Some lenders will consider issues with your credit file, though there are restrictions and these may vary depending on your contract. To avoid the disappointment of a declined mortgage you should speak to an ams: specialist.

Some, but not all, lenders do have minimum income criteria for all types of contractors but not all. We ensure we only look at placing you with the right lender for your circumstances.

This is common for contractors and we deal with it daily. It is best to get the right advice before you apply as lenders take a different view on this case by case.

Most lenders will prefer an end date and an amount of time remaining on the contract however it does depend on your circumstances, what type of contracting work you do and career to date. However there may be options when a contract is rolling.

Absolutely, criteria change massively for all contractors when discussing your options on a BTL basis.

Not necessarily though the criteria around this differs lender by lender depending on the contract and what you do. It is important if you are making use of the agencies umbrella company to apply to the right lender.

ams: will have this discussion with you from the very start of your mortgage journey and would never make a recommendation that is not affordable based on the contract work you do. As all of our advisors are protection specialists we will also discuss these needs going forward.

Absolutely. And you may even qualify for out referral incentive.