Contractor Mortgage Brokers
Whilst being self-employed can offer unrivalled benefits, such as freedom and flexibility, that you wouldn’t find in any other type of employment, here at Avail Mortgages, we understand that it can also present various challenges, such as uncertainty and a unique set of personal and financial circumstances.
It’s a common conception that being a contractor makes it hard to find a good mortgage deal, which can often create anxiety around the process of getting a contractor mortgage. However, there’s no need to feel anxious about it. We appreciate the set of challenges that contractors face, but with our expert knowledge and valuable experience in the industry, we can help you to overcome them.
Our team of knowledgeable and impartial professionals are here to help you find solutions that are the most appropriate for you and your unique set of circumstances. We understand that these circumstances and challenges will vary from person to person, which is why our services will always be tailored directly to you, your goals and your circumstances. Thanks to our strong relationships with lenders, you’ll have access to excellent policies, exclusive offers, and bespoke solutions that are as unique as you.
Here at Avail, our fully-qualified advisors work in accordance with the principles set out by the Financial Conduct Authority (FCA) and their ‘Treating Customers Fairly’ (TCF) initiative, ensuring you receive a high-quality service every time. Our advisors have the expertise to assess your circumstances and discuss the options that are most suitable for you as a contractor. Client care is central to the services we deliver and, as demonstrated by our outstanding client feedback, you’ll always feel informed and supported throughout the process of getting a mortgage.
Offering services across the North West and further afield in the UK, we are committed to making the process of getting a mortgage straightforward and stress-free, thanks to our expertise and forward-thinking approach. If you’re interested in finding the right contractor mortgage for you and using our expert mortgage advice to guide you through the process, then call us on 01484 556 245 or reach out to the Avail Mortgages team online today.
What Is A Contractor Mortgage?
An independent contractor (who is also known as a consultant or freelancer) is somebody who is self-employed, that may also operate through a limited company, that carries out work for other people or companies. Usually, they are contracted for a certain period of time to work on a project based on their knowledge or skill set, and will sometimes charge a daily rate for their services. If you’re a contractor, you might have reservations about getting a mortgage. This is because you aren’t on the payroll as an ordinary employee and therefore may not have the same financial records or consistent earnings, especially if you have gaps between contracts. It’s entirely common for contractors to read or hear that it’s difficult to get approval, or that you can’t find a lender to let you borrow a mortgage loan. This isn’t the case at all – these beliefs are, to a large extent, myths. Your unique set of circumstances means you’ll apply for a contractor mortgage – a mortgage designed specifically for contractors who do not have a regular, monthly income. With the help of Avail, you can secure a competitive contractor mortgage that’s suited entirely to your circumstances.
If you are a contractor and you plan to buy your property with a partner who is in full-time employment, mortgage lenders may be more willing to let you borrow as this may increase their confidence in your ability to make repayments. However, showing your income levels and proof of consistent payment is still important. If your income levels do fluctuate over time, a guarantor mortgage may be an option to consider based on your circumstances. This is where a relative, such as a family member, provides a guarantee on your mortgage against their property. If you choose to work with Avail, all of your options will be discussed in detail so you can choose the option that is the most appropriate for you.
Self-employed people often consider themselves to be a contractor or a freelancer, but quite often there can be some confusion around the terms. Technically, a contractor is a self-employed freelancer. However, for the purposes of applying for, and getting, a mortgage, a freelancer might not count as a contractor. Usually, a contractor will work through a limited company, taking on one contract at a time. They may be classified as employed if they are employed by an agency, but they may also identify as self-employed if they operate as a sole trader. In contrast, a freelancer will often have multiple contracts with several clients that are shorter than those of a contractor. From the perspective of a lender, being a freelancer will affect the stability of income. If you have several sources of income, these might be less reliable than one longer-term contract.
Whilst those are the main differences, you may still be unsure of which category you fall into and which type of mortgage is best for you. We understand that navigating mortgage applications can be stressful at the best of times, but there’s no denying that contractors and freelancers often experience more stress than those who are permanent employees with a regular income. It really doesn’t have to be that way and our mortgage brokers are on hand to provide advice and guidance, helping you to make an informed decision and find the best competitive mortgage deals.
How Do I Get A Contractor Mortgage And How Much Can I Borrow?
When you apply for a contractor mortgage, the most important thing for a lender to see is proof of income – to ensure you can make the regular payments to pay off your mortgage. This is part of an affordability assessment that the provider will carry out to inform how much they should lend you – this is a standard procedure when applying for any mortgage. This assessment tends to look at how much you earn, how secure this income is and what your regular expenses are. Usually, you’ll need to show evidence of at least six months of earnings history, but most will want to see between two to three years of accounts to get a clearer indication of how consistent your income is. As a result, applying for a mortgage earlier on in your career may prove more difficult. However, there are still options available that we would be happy to discuss with you.
If you have years of experience as a contractor, mortgage providers may use the average income you’ve received in recent years to estimate your average income. Using this average, they will then calculate how much money you can afford to repay, and subsequently how much money you can borrow from them. However, if your income fluctuates dramatically over the years, it is unlikely that they will use this approach to calculate an average income. Instead, they may take your most recent earnings, or the lowest, as an indication of your average income. In this case, you may have to borrow a smaller amount of money.
If you’re a contractor that charges a day rate, some providers may calculate your average income by taking this into consideration. However, many lenders will want you to have a 12-month contract in place for them to use this method. If lenders use your day rate as the basis of their calculations, they will take your day rate, multiple this by the number of days you usually work each week, and then multiply that out to the full year. They will also take any holidays or gaps between contracts into consideration, and therefore won’t multiply by a full 52 weeks. This approach can be useful if you do not have a clear track record of your income yet – for example, you may have recently left full-time employment to pursue a career as a contractor. If this is the case, lenders will want to see proof that you will succeed in your role. Evidence for this may include any existing signed contracts, your previous experience and any relevant qualifications.
Getting a contractor mortgage may seem difficult, but there are things you can do to put yourself in the best position and to increase your chances of securing a good mortgage deal. It is important to provide as much evidence as possible to show your suitability for a mortgage. To evidence your earnings, you can show potential lenders invoices, bank statements and other accounts. To evidence the likelihood that you will succeed as a contractor, you can provide evidence of contracts, qualifications and experience – it is important that you provide as much detail as possible. You can also save for a higher deposit to offer your lender, which will then decrease the amount of money you need to lend. It’s also useful to improve your credit score before applying for a mortgage so that the lender can see your ability to repay the loan. It’s also wise to speak to a contractor mortgage broker who can discuss all of the above, your mortgage options and assist in the application process – that’s exactly where our expert team come in.
Why Choose Avail?
With services tailored specifically to you, we can help to find mortgages for contractors that suit your own unique personal and financial circumstances. Avail was established back in 2018 to offer services based on transparency, reliability and impartiality. We’re proud of our approach that allows our clients to find mortgages and any relevant insurance policies that suit them. As well as our approach, you’ll have access to a range of different policies. We have worked hard to build strong relationships over the years with key providers that allow us to offer you bespoke policies that meet your own circumstances and needs.
When you choose Avail, you can have peace of mind that you’ll have access to support whenever you need it. As a contractor, we know that you live a busy life and your daily routines might not always follow the standard 9-5 structure. That’s exactly why we work around you, your needs, and your routine. We’re committed to making the process of selecting a mortgage, or the right insurance such as Home Insurance and Income Protection Insurance, as easy as possible. Our online client portal allows us to do just that, by speeding up the process and allowing you to access your documents whenever you like, at a time that is convenient for you. We’re also local to you – wherever you are, we can help. We work with a range of clients in areas such as Sheffield, Huddersfield, Harrogate, Leeds, Bradford and York, as well as the rest of the UK.
Get In Touch
If you’re interested in learning more about contractor mortgages, then we’d love to hear from you. Whether you have questions about how it works, or you’re ready to get started on finding the best option out there for you, then get in touch with the team at Avail Mortgages online, by calling 0330 118 0383 or by emailing [email protected]. We’re happy to discuss contractor mortgages if that’s what you’re looking for, or we can offer information and insight into our other mortgage products that are available too. Whatever you need assistance with, our expert advisors are here to help.