As a contractor in London, finding a mortgage might seem daunting. But it doesn’t have to be. Here’s what you need to know about contractor mortgages in London.
1. What is a contractor mortgage?
A contractor mortgage is a mortgage for contractors who work on a self-employed basis. Traditional mortgages often require proof of steady income, but a contractor’s income may not be as consistent. Contractor mortgages London take into account the irregular nature of a contractor’s income and provide a more tailored lending solution.
2. Can I get a contractor mortgage if I’m a first-time buyer?
Yes, you can. Contractor mortgages in London are available to first-time buyers, just like regular mortgages. The amount you can borrow will depend on various factors such as your income, credit history and deposit amount. It’s important to speak to a mortgage broker who specializes in contractor mortgages to find a lender that suits your individual circumstances.
3. How do lenders assess my income as a contractor?
Lenders will typically use your daily rate and the length of your contract, rather than the annual salary typical of a full-time employee, to assess your income. They will usually take an average of your last 12 months’ earnings, but some lenders may consider earnings over a shorter period of time. It’s also worth noting that if you’ve been contracting for less than 12 months, you may still be able to get a contractor mortgage in London. Speak to a specialist broker to explore your options.
4. Do I need a bigger deposit for a contractor mortgage?
Not necessarily. The deposit you need for a contractor mortgage will depend on various factors such as the type of property you’re buying and the lender’s criteria. However, some lenders may ask for a larger deposit from contractors than they would from employees. This is because contractors are perceived as higher-risk borrowers due to the irregular nature of their income. Again, this will vary from lender to lender, so it’s important to speak to a specialist broker who can guide you through the process.
5. How do I prove my income for a contractor mortgage?
You’ll need to provide evidence of your earnings, such as your contracts, invoices, and bank statements. Lenders will typically require a minimum of two years’ worth of contractor history, but some lenders may be willing to consider you if you’ve been contracting for less time than this.
6. What are the benefits of a contractor mortgage?
Contractor mortgages in London offer a range of benefits, including:
- More tailored lending solutions: Lenders who specialize in contractor mortgages understand the unique nature of a contractor’s income and can provide more tailored lending solutions.
- Competitive rates: Contractor mortgages in London often come with competitive rates, with some lenders offering rates as low as those available to employees.
- Flexible criteria: Contractor mortgages are often available to those with less perfect credit histories, or those who have been declined by traditional lenders.
- No need to wait: Rather than waiting until you have two or three years’ accounts, you may be able to secure a contractor mortgage much sooner than that.
Finding the right contractor mortgage in London doesn’t have to be stressful. By speaking to a specialist broker who understands your needs as a contractor, you can find a mortgage solution that works for you. Remember to provide evidence of your income and work with a lender who specializes in contractor mortgages to ensure that you get the best deal possible.
