Mortgages for Contractors
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- Self-employed but working only for 1 company
- Employed but on a fixed term or temporary contract
- Credit rating
- Length of contract
- The type of contract that you have currently
- How long have you been contracting for?
- How long you have worked in that industry
- Were you working in the same industry before becoming a contractor
Contractors typically fall into the following categories:
- Self employed contractors working for a single company on a day rate – can often apply for a mortgage straight away based on the day rate of the contract so long as it is at least 6 months long.
- Short term or fixed term employed contractors – typically require previous experience contracting in the same industry.
- Umbrella company contractors – 12 months working history is normally required before you can apply for a mortgage.
- Zero hours contract workers – usually a minimum of 6 months continuous work on the contract. However, some lenders may require 12 month.
- Agency workers – typically require 12 months continuous working before applying for a mortgage.
As you can see, mortgages for contractors can vary depending on the specifics of the situation.
If you are a contractor working through and umbrella company, you may want to speak to a specialist mortgage broker.
There are normally plenty of options for umbrella contractors. However, the criteria can vary dramatically between mortgage providers.
You will normally need at least a 12 month track record working through an umbrella company. Ideally having had your contract extended at least once.
The good news is Yes, you can get a mortgage if you are a zero-hours contractor. A lot of lenders do not allow zero-hours contracts. For this reason it is advisable to speak to a specialist mortgage broker.
You will typically need to have at least a months track record. Most lenders that allow zero-hours contractors will need 12 months. Since the COVID-19 pandemic, a 12 month requirement is more more common. However, if you haven been on a zero hours contract for less than 12 months, get in touch and chat to one of our mortgage experts to find out more.
Certain types of occupation can carry more weight when it comes to getting a mortgage as a contractor. This could be:
- IT Contractors
- Solicitor / Barrister
With these types of occupation, there can be more flexibility in terms of the track record etc. This is mainly because the roles mentioned are seen to be more secure. Typically, the mortgage affordability could be calculated using the day rate on the contract.
- Missed payments
When applying for a mortgage there are some standard documents everyone need to supply, such as Passport, driving licence, and bank statements.
When a contractor is applying for a mortgage, evidencing income is vital. We would typically need to see:
- Copy of your contract
- Umbrella staff will need to provide payslips
- Temp or fixed term contract employees – you will need to provide payslips
- Self-employed contractors should provide tax calculations and tax overviews covering the the last 3 years where possible. If you have not been self-employed this long provide what you have.
When you are a contractor, mortgages can be complicated. Thankfully, as whole-of-market mortgage brokers we specialise in helping people like you. Because of this we can make the experience as painless as possible for you. Get in touch today and have a chat with one of our friendly team of experts to fid out how we can help you get a mortgage.