In 2016 more and more people are moving away from full-time employee status and into self-employed roles, with the latest figures from the Office of National Statistics showing that there are now over 4.6 million people working for themselves. This is an all-time high, representing around 15% of all people at work. When working for yourself, the issue of obtaining mortgages can become more pressing. Contract work in particular can mean more flexibility for employers compared to recruiting long term employees, but it can have negative consequences for those lacking the credentials often needed for a mortgage. Many of those operating a small business or employed on a fixed term contract have found it difficult to obtain or renew mortgages.
There are certain things the self-employed need to do to secure a mortgage. Any lender will want to see evidence of your income over a period of time. A substantial deposit is always beneficial, especially if you do not have records of trading for very long as contractor. However, at present, it is possible to purchase a property with as little as a 5% deposit. Naturally though, the larger the deposit, the better the rates offered to you. Although with record low rates at present, even a small deposit will get you a great, competitive interest rate.
The general belief is that mortgage lenders may require up to three years of accounts, however with the right broker, mortgages can be negotiated far more quickly. Lenders vary considerably in what they consider acceptable trading periods, but here at South Coast Mortgage Services it is possible to find a lender willing to consider a client with only one-year trading history, and we may even be able to help someone who has less than a one-year history, but who has a strong professional background in their industry.
High street lenders may use a rigid formula or a computer system to assess affordability for a mortgage and lack the flexibility to adequately examine the viability of a contractor. This is where our knowledge of dealing with contractors is especially useful, when presenting the information in a fashion that makes the contractor a good prospect for lending.
A good broker will know which lenders are contractor friendly, and the best ways in which to approach these lenders on a contractor’s behalf. Correctly packaging the application is a fundamental part of obtaining a contractor mortgage, and it is essential that you deal with brokers who specialise in these types of mortgages.
If you’re a contractor seeking a mortgage, contact us today for your free consultation. We have access to numerous lenders, both on the high street and specialist, who are excellent in helping contractors obtain great mortgage deals.
Contact us: https://southcoastmortgages.com/contact-us/