Getting a mortgage when you’re a contractor isn’t quite the impossible task that many people are led to believe, and there are some tall tales floating about with regards to what your obstacles are.
Here, Jamie Challis (Head of Crunch Mortgages) reveals the five biggest myths that contractors wrongly believe apply to them when talking about getting a mortgage.
Plus, we give some great tips on how to get that elusive mortgage, and how we can help.
Contractor Mortgage Myth 1: Contractors do NOT need to have three years of accounts to get a mortgage
Contrary to popular belief, contractors can actually get a mortgage based on their day-rate.
Crunch Mortgages work closely with contractor-friendly lenders, and this enables us to arrange a mortgage based on your current contract, rather than the number of years you’ve been working as a contractor.
Contractor Mortgage Myth 2: Contractors do NOT need to have been contracting for at least six months
Our specialist lenders can help – even if you’ve only just taken the leap from a permanent position and have been contracting for as little as one day.
Contractor Mortgage Myth 3: Contractors are NOT labeled as high risk by banks and building societies when it comes to getting a mortgage
Contractors aren’t viewed as a high risk any more than a full-time employee. A contractor will be assessed in the same way as an employee; your self-employed status won’t hold you back.
Contractor Mortgage Myth 4: Contractors do NOT need a large deposit
Of course, having a large deposit will mean you represent less of a risk for mortgage lenders, and it’s natural to expect a more competitive mortgage deal with a bigger deposit. However, you can put down as little as 5% and still be positively assessed for a mortgage.
Contractor Mortgage Myth 5: Lenders will NOT charge contractors a higher mortgage rate than permanent employees
As a contractor, you may even receive lower mortgage rates if you’re in a better position to put more savings aside and can provide a larger deposit.
Contractor Mortgages Webinar
If you’re looking for more reassurance, this recent webinar gives detailed tips on getting a mortgage as a contractor, freelancer or limited company director.
If you have further questions, you may be interested in reading the self-employed mortgages Q&A which took place after the webinar, in which Jamie answered questions from people just like you.