Contractor Mortgage Guide

Dolan Accountancy has three contractor mortgage partners, Wardour Investments, Caulder Financial Services and Contractor Friendly Mortgages who specialise in taking the difficulty out of securing a mortgage, for contract workers. You can find out more about them here, our IFAs.

All three have partnerships with a large number of High Street lenders, enabling them to secure a mortgage without any additional difficulties. They have answered some common questions below, so that you know exactly what to expect.

I’ve heard lenders quote higher interest rates for contractors – is this true?

This is one of the most common misconceptions we come across and it’s just that – a misconception. Interest rates are generally the same as for permanent staff. In some cases, interest rates can even be lower than for permanent employees! Typically, this applies when either your credit rating is very strong, or when you have a large deposit saved – this is common when contracting long-term, as any professional freelancer knows the need to keep money in reserve.

As a contractor, am I classed as a ‘high-risk’ individual in terms of a mortgage?

Absolutely not. The lenders we partner with will base your risk status on your credit rating and your deposit available. If your credit rating is fine, you should be able to borrow around four times your current contract rate. The same factors that affect a permanent employee – CCJs, defaulted payments or outstanding credit card bills – will weigh against you too.

Do I need three years of accounts or to have been contracting for a minimum period of time?

In the past, this might have been true – but for several years now, contractors have been able to secure a mortgage on the basis of their current contract rate. You may still hear that you need to have been contracting for a ‘substantial period of time’ when contacting a broker directly, from inexperienced first-line staff on a helpdesk – but this is simply part of the lender’s strategy to minimise risk.

Is it more complicated to secure a mortgage a contractor mortgage?

Perhaps if you approached a broker directly, without using a specialist contractor mortgage service – but why would you do that. Both of our IFAs have built up partnerships with lenders and key underwriters over many years and these relationships allow us to help you sidestep any additional complications. Getting started is as easy as providing your contract, ID and bank statements.

If you’re looking to remortgage and existing property, move to a new one or take the first step on the ladder, or even want to find out how much you could borrow based on your contract rate, fill in the form below and one of our IFA’s will be in touch.

If you are looking for a commercial mortgage, we recommend speaking to Wardour Investments .