Top Mortgage Options for Self-Employed Contractors in the UK
Top Mortgage Options for Self-Employed Contractors in the UK
Blog Article
Understanding Mortgage Options for Self-Employed Contractors
As a self-employed contractor, securing a mortgage can be more complicated than it is for salaried employees. Lenders may have strict criteria when it comes to contractors’ income stability. However, there are mortgage options tailored to the needs of contractors, which can make the process smoother.
Specialist Contractor Mortgages
Specialist lenders offer mortgage products specifically designed for contractors. These lenders understand that self-employed income can fluctuate, so they provide more flexible terms and criteria. Some specialist lenders may only require a year or two of accounts, or they might accept your daily rate as proof of income.
Mortgage for Limited Company Contractors
If you work through a limited company, mortgage lenders will look at the company’s financial documents. They may take a percentage of the company’s profits or your salary and dividends as proof of income. Some lenders will even consider your contract value instead of tax returns to calculate your borrowing potential.
Umbrella Company Contractors
If you’re employed through an umbrella company, proving your income may be easier. The umbrella company acts as an intermediary and typically pays you a regular salary, which can be more appealing to lenders. Some lenders may even accept your payslips from the umbrella company as evidence of income.
Income-Based Mortgages
Some lenders focus on calculating your income based on your contract rate rather than traditional payslips. This approach is beneficial if your income fluctuates, but you’re consistently employed in your field. A contractor mortgage broker can help you find the best lenders who use this calculation method.
Conclusion
While obtaining a mortgage as a contractor might seem more complicated, there are various options available. The key is to work with a mortgage advisor who understands the unique needs of self-employed contractors and can match you with the right lenders.
Need guidance? At Contractor Mortgage Solutions, we provide expert advice and help you explore the best mortgage options for self-employed contractors.