Can I Get a Mortgage as a Contractor?
First things first, let’s clear up the confusion around what separates a standard mortgage from one tailored for contractors. A standard mortgage is typically designed for those in permanent employment, with regular paychecks and job security. But as we all know, the gig economy is booming, and many folks are choosing the path of a contractor or freelancer.
How Do Contractor Mortgages Work in the UK?
Contractor mortgages, on the other hand, are crafted for the flexible workforce. These mortgages take into account the varying income streams that contractors often have.
Lenders understand that your earnings might not look like a monthly paycheck, but rather a series of contracts and projects.
They assess your affordability based on your average yearly income and look for consistency in your contracts.
How Much Mortgage Can I Get as a Contractor?
Now, here’s the million-pound question. How much can you get as a contractor? Well, the amount you can borrow depends on your individual circumstances, including your annual income, expenses, and credit score.
Lenders usually consider the average of your last three years’ income, which can include both your salary and dividends from your company.
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Mortgage Lenders for Contractors
Not all lenders are created equal, and some have more experience dealing with contractors than others.
You want to find a lender who understands the intricacies of your income structure and can offer you a deal that suits your needs.
Specialist contractor mortgage brokers can be a huge help in navigating this landscape.
Do Contractor Mortgages Cost More?
Ah, the big “C” word – cost. It’s a common misconception that contractor mortgages are more expensive.
While interest rates may sometimes be slightly higher to mitigate the risk associated with varying incomes, the difference isn’t usually drastic.
Plus, with the right advice, you can still find competitive deals that won’t break the bank.
Can You Renew Your Mortgage If You Are a Contractor?
Absolutely! Contractors can renew their mortgages just like anyone else.
If you’ve maintained a strong credit history and a consistent income, there’s no reason you can’t refinance or renew your mortgage when your current deal expires. It’s all about proving your ability to meet your mortgage payments.
Plus, with the right advice, you can still find competitive deals that won’t break the bank.
Free Consultation
We’re committed to putting you first and providing you
with the highest level of service and support.
Does Working as a Contractor Affect Your Mortgage? - From Employed to a Contractor
Now, let’s address the transition from being employed to becoming a contractor. If you’ve recently made the switch, lenders may look for a track record of at least 12 months’ contracting experience.
They want to see that you’ve got your financial affairs in order and that your contracting career is stable. So, a little patience and planning can go a long way in ensuring a smooth mortgage journey.