Has Your Contractor Mortgage Been Declined? I can help.
Special Circumstances Need a Specialist Contractor Mortgage Broker
Every year, a higher percentage of the workforce is made up of contractors and contract workers. But the way mortgage applications are processed hasn’t yet caught up with this change, which means more and more people are having their contractor mortgage applications refused for reasons beyond their control.
If you find yourself in this position, it can be frustrating at an already stressful time. But I can help you because I am a contractor mortgage broker, helping clients who have CCJ’s or Defaults on their credit file. I specialise in helping those who’ve had an application declined.
If Your Contractor Mortgage Was Refused, That Doesn’t Mean You Won’t Be Successful Next Time
Many lenders want to see a regular pay slip before they sign off on a mortgage. Contractors can fall through the gaps, because even though you’re invoicing more than enough to pay your mortgage and meet their requirements, your fluctuating income is seen as a risk.
The standard criteria lenders apply just doesn’t work for contractors, and that means you can find your applications refused regardless of the amount of money in your bank account. This way of thinking is becoming outdated with a workforce that’s becoming more and more reliant on the hard work of contractors – and it’s a way of thinking that I’ll challenge by securing your contractor mortgage.
I know which lenders accept contractor mortgage applications having built up a list of lenders and I’ll make sure your application isn’t rejected because they are looking for accounts or SA302’s. The lenders I talk too will lend based on your weekly contract amount times a number of weeks you work in a year. Provided you have had a contract or two under your belt, I have lenders who will lend to you and if you have a poor credit history.
You do not necessarily have to have been trading for a year as lenders will look at your career history.
For example, if you were employed as a Programme Manager for a few years but now started out on your own contracting as a Programme Manager, lenders take comfort that you are working in the same line of work. If you were on your second 6 month contract and had a reasonable deposit, you would stand a much better chance of getting a mortgage than someone who had only just started Programming having come from a background of Car Sales for example.
Listed below is some of the criteria that one lender will use when assessing you for a mortgage;
· Income calculated on current weekly contract x 46
· Only 12 months contracting history required
· Could be less than 12 months if contract is within an existing profession
· Any profession
· No minimum income
In my nearly three decades as an mortgage broker, I’ve learned the root cause for mortgages being rejected. And it’s very simple.
Lenders don’t like to take risks.
As a contractor, you represent an increased risk to lenders because once a contract comes to an end, you may not get a new one. As a contractor mortgage broker, I’ll do everything I can to minimise the risk you pose to lenders and negotiate a successful mortgage application on your behalf.
But there are steps you can take to ensure you’re successful when you apply.
What Can I Do To Increase My Chances of Success?
1. Approach a Specialist Broker like me!
If you’re reading my website, you’re a phone call away from increasing your chances of success. I understand the way contractors are paid and what paperwork lenders are looking for when applying for a mortgage. I can help you to secure a mortgage based on your contract rate even if you’ve been declined in the past.
2. Manage Your Finances
This almost goes without saying, but your finances need to be in order. Contracting can be lucrative, but your financial records need to demonstrate this. By this I mean your business bank statements cross reference with weekly contract invoices, your personal bank statements do not show bounced DDM’s or returned cheques. If you have a positive credit rating and your finances are in order, you will be in a stronger position when it comes to finding you a mortgage.
3. Have a deposit
Unsurprisingly, large deposits help a successful application. The higher your deposit, the lower the loan to value ratio will be and the fewer hoops you’ll be forced to jump through. If you’re managing your finances well, you should be able to put money aside to increase your chances of a successful application
Owning your own home doesn’t mean finding a different career path to follow. Call me, Steven Neale, now on 01494 526 400 to discuss a contractor mortgage.