Are you preventing yourself from securing a contractor mortgage?

If you are a would-be contractor mortgage borrower, your own thinking could be standing between you and securing a loan to buy a home.

The research conducted by mortgage market analysts identified five reasons why contractors thought they wouldn’t qualify for a mortgage.

1. Being on a zero hour contract. While some mainstream lenders may consider zero-hour contracts to be too risky, other niche lenders do not. There are many other factors that lenders take into consideration when assessing a loan application including your level of expertise and demand for your skills. Having a zero-hour contract doesn’t have to be a barrier.

2. Having a less-than-perfect credit rating. Lenders do appreciate that everyone’s circumstances are different and many have lending criteria that reflects this. They accept that people may struggle financially from time-to-time but this doesn’t have to exclude you from obtaining a mortgage if this has been your experience. Knowing which lender to approach is key so that your application isn’t rejected outright.

mortgage3. Having outstanding unsecured loans. It’s not the loan itself that lenders look at but your ability to handle the repayments without affecting your ability to make your mortgage repayments. If you have a strong case, lenders will want to work with you.

4. Having a break in your contract. If there’s been a break between contracts or you’ve taken time because of family responsibilities, this doesn’t necessarily have to be a problem. Lenders who take a case-by-case approach to underwriting will consider applications on their individual merits. If it makes sense in the long run, a break in your contracts won’t stand in your way.

5. Just starting out as a contractor. Even if you are new to contracting, you can still obtain a mortgage. Again, skill, experience and demand for what you offer will be important considerations for the lender. If you can demonstrate all three as well as the daily rate you’d be charging, the fact that you’re just starting out doesn’t have to hinder your application.

Before doing anything else, the best advice would be to consult with independent mortgage broker, Deal Direct. Why? Simply because we know what it’s like for you and we know the market inside out. Consequently, if there’s a mortgage out there that is suitable for you, we’ll find it and help you to secure it.

For the very best on contractor mortgage advice, consult with Deal Direct on 0800 048 8828.

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Article published: Sunday, December 09, 2018
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