Personal finance

What is an umbrella company mortgage?

What is an umbrella company mortgage?, image of a couple receiving their keys | Crunch

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    An umbrella company mortgage is actually like any other mortgage, except it’s designed for anyone who works through an umbrella company, and therefore is able to understand how the income is shown.

    Not all lenders will offer mortgages in this space, however. For instance, most high street lenders turn away umbrella mortgage customers as they feel the income can be more complex to understand (of course, it’s actually incredibly easy once you have seen a few!).

    This is why speaking to a broker who specialises in contractors and the self-employed is vital, as they know exactly which lenders to approach.

    What are the benefits of an umbrella contractor mortgage?

    Regular income evidence

    Working as a self-employed person or a contractor can alienate a number of lenders, simply because they don’t understand how to truly calculate your income. The benefit of using an umbrella company is that the lender can be given weekly or monthly pay slips instead of having to wait for your end of year accounts.  

    This means that there are some lenders who traditionally will not consider the self-employed that will suddenly be happy to lend to someone trading under an umbrella company.

    The contract value may be greater than the payslip suggests

    For people using umbrella companies, some specialist lenders are happy to consider the overall contract value rather than just the payslip - as long as the pay received is consistent with the contract, of course!

    Mortgage as a new umbrella company

    Some lenders will consider your application even if you’re new to self-employment, simply because you’re under an umbrella company. This could allow you to apply for a mortgage just a few months into a contract, rather than having to wait for six+ months to go by. 

    Borrowing more than if considered self-employed

    Depending on how you treat your expenses, you might find that the gross pay under an Umbrella company actually shows a greater number than your net profit would as a self-employed person. This could allow a lender to give you a bigger mortgage amount.

    Is an “Umbrella mortgage” right for you?

    If you work under an umbrella company and want a mortgage, the best thing you can do today is call a specialist broker, such as Crunch Mortgages.  

    Working under an umbrella company should never be a reason to miss out on the mortgage you want. Get in touch with us today, and let us help you find the perfect solution for your personal circumstances.