The subject of contractor mortgages is extremely relevant for the UK with a growing number of entrepreneurs and those with a self-employed status. Contrary to popular belief, there is a significant pool of finance available for those who depend on contract/self-employed income. We have experience as a contract mortgage broker and have built up our own network of contacts over the years. The fact that Enness fully appreciate the trials and tribulations of variable income flow puts us in a perfect position to secure the best deal for you.
Since the 2008 US sub-prime mortgage crash we have seen the introduction of ever more stringent contractor mortgage affordability calculations. That is not to say that finance is not available but this has become something of a specialist/niche market in which we have a strong and growing reputation. Many of the mainstream mortgage companies have effectively left the contractor mortgage market deeming it not compatible with their risk/reward profile. These are companies who want a constant and reliable flow of income and perhaps do not fully understand life as a contractor/self-employed person.
This is the first question we get asked; how much can a contractor borrow based on income. To clarify the situation, there are a number of factors which lenders will take into consideration:-
We know from our own experience that it is vital to approach the right lenders for your specific situation. It is also paramount that your finances are presented in the most advantageous light to secure mortgage finance.
Those who take a scattergun approach to the market can impact your credit rating and ultimately lead to you being turned down by lenders. We know who to approach, when to approach them, how to approach them and what information they require. There is nothing more frustrating than a contractor who has of firm track record of bringing in significant annual income but trouble obtaining finance. Thankfully, there are specialist lenders who will take a look at the bigger picture as opposed to a snapshot or short-term bank statement.
As we touched on above, it is imperative that you approach the right people with the right information in the correct format. The overriding factor which will determine the level of funding made available for a contractor mortgage is reliability. The more stable your contract income the more confident lenders will be in your long-term ability to repay borrowings.
When looking at the best contractor mortgage rates there is no one size fits all. There is an array of different mortgage instruments available such as repayment mortgages, interest only mortgages, bonus payment mortgages, etc, all crafted to suit your specific circumstances. Where possible, it makes sense to utilise an element of any savings and available assets which can be used as collateral. There is also the opportunity of a degree of flexibility whereby you can use additional one-off income to pay down your mortgage over and above your regular payments. This not only reduces the eventual capital repayment but will have an impact on interest charges going forward.
It is fair to say we are well aware of the challenges of securing contractor mortgage funding. Our independent status allows us access to literally hundreds of lenders who specialise in various areas of the market such as contractor/self-employed mortgages. These are companies who fully appreciate the often unpredictable nature of a contractor’s income. When presented with the relevant details and a solid repayment plan we are confident in our ability to secure lending for you.
As well as access to traditional funding companies we also have access to an array of private banks where there is often a greater degree of flexibility. This can be a fragmented market, one which is difficult to wade through but one in which we have built up our own network of experts. More than half of our clients are self-employed, so not only are we up to speed with the latest market trends and offerings but we can work on extremely short timescales. Give us a call today for a no obligation chat and we can go through your requirements and your financial circumstances in detail.