We understand that your circumstances as a contractor may be more complex than a ‘typical’ mortgage client and getting a mortgage could prove challenging. This is why we've partnered with Foster Denovo, a multi-award winning national firm of financial advisers, who specialise in mortgages for contractors just like you.
Foster Denovo have a wealth of knowledge and experience in helping consultants and contractors secure the mortgage they want, in the time they want. Unlike most mortgage advisers, their contractor focus has allowed them to have access to preferential mortgage terms and exclusive mortgage deals with lenders specifically for contractors like you.
Foster Denovo have provided the following five tips on securing a contractor mortgage:
1. Use a contractor mortgage specialist
It’s very easy to assume that you can get out there and find the right mortgage deal without any help. However, the market in general has tightened, and now there is plenty you need to do before you can be approved for a mortgage. This is especially the case if you are a contractor, and don’t neatly fit within any of the high street lenders’ standard box ticking criteria.
Therefore, we recommend you find a mortgage adviser that specialises in working with contractors, freelancers and the self-employed. Foster Denovo, a multi-award winning national firm of financial advisers, who specialise in contractor mortgages, will save you hours of making calls or searching online trying to find a lender that will lend to contractors.
Whilst Foster Denovo work on a whole of market approach, they also know which lenders are more favourable to contractors and their circumstances. So they’ll be able to identify the lender most likely to suit your situation, helping you secure a competitive mortgage.
2. Save, save, save for a deposit
The 100% mortgage is a distant memory, and the best rates available now go to those people who have managed to save a deposit. 10% should be enough, but 10-25% is better.
If you have not managed to save this amount for a deposit, or if you don’t have an existing property which is worth more than you paid for it, there will still be mortgages available to you - but you will pay a higher interest rate. The more deposit that you can put into a new property, the lower the interest rates, and the lower the repayments on a monthly basis.
3. Keep your credit rating as good as possible
Your credit score is key to helping you secure a mortgage. Even if you have a good income and a sizeable deposit, you could still have a mortgage application refused if your credit rating is poor. Lenders are being far stricter, so it’s best to avoid anything which may give them a reason to refuse your mortgage. Which means it’s vital to keep your credit rating as good as possible.
4. Make sure your contract is up to date
You will need to have a copy of your signed contract which is totally up to date. This must state the length of your contract, and your current contract rate. Foster Denovo will use your contract and CV to support your mortgage application and to save you having to produce three years of accounts.
Also, as a contractor you may find that you have breaks in your contracts, but it is important to be aware that too many gaps may have a damaging impact on your mortgage application. Many lenders are now aware of contractors working habits and gaps of up to six weeks on your CV are usually considered normal but any lengthy breaks may be questioned.
5. Stick within your limits – work out what you can afford to pay
It’s important that you are realistic about what you can afford to pay each month. You might find you can borrow more from a lender, but this may result in higher monthly payments than you can actually afford.
It’s also important to consider that interest rates can go up, and if you’re on a variable rate then your monthly payments may no longer be affordable, especially if you’ve pushed yourself to your limit already. Foster Denovo will help you to find a mortgage that suits your needs now, but also taking the future into account.
Whatever your circumstances or mortgage requirements, we believe Foster Denovo can help. From finding out the best interest rates available to helping you calculate how much you can borrow based on your contract rate.
Want to know more? Give us a call or email firstname.lastname@example.org.