A contractor mortgage is a type of mortgage designed specifically for self-employed contractors who work on a project-by-project basis, rather than as salaried employees. Unlike traditional mortgages, which require a regular income stream and employment history, contractor mortgages take into account the irregular income streams of contractors.
To qualify for a contractor mortgage, contractors typically need to provide evidence of their income and work history, which may include contracts, invoices, and tax returns. Lenders may also require a higher deposit or a guarantor to mitigate the perceived risk of lending to self-employed individuals.
It’s important to note that different lenders may have different requirements and criteria for approving contractor mortgages. It’s recommended that contractors seek the advice of a mortgage broker who specializes in contractor mortgages to help navigate the lending process and find the best mortgage deal for their individual circumstances.
Day Rate Contractor
To apply for a day rate contractor mortgage, borrowers will typically need to provide evidence of their day rate income, such as contracts, invoices, and bank statements. Lenders may also require a larger deposit or proof of financial stability, such as savings or investments, to mitigate their perceived lending risk.
How Much Deposit Will I Need?
You will need at least a 10 percent deposit to increase your chances of securing a mortgage.
A contractor mortgage broker is a professional who specializes in helping contractors secure mortgages. Contractors are self-employed individuals who work on a project-by-project basis, often with multiple clients. Because of the nature of their work, contractors may have difficulty securing a mortgage through traditional means, as they may not have a steady income or a long-term employment contract.
A contractor mortgage broker understands the unique challenges that contractors face when trying to obtain a mortgage and can help them navigate the process. They have experience working with lenders who are more willing to work with self-employed individuals and can help contractors find mortgage products that fit their specific needs.
In addition to helping contractors find a mortgage, a contractor mortgage broker can also provide advice on how to improve their credit score and increase their chances of getting approved for a mortgage. They can also assist with the application process and provide ongoing support throughout the mortgage process.
Overall, a contractor mortgage broker can be a valuable resource for contractors who are looking to buy a home but are struggling to secure a mortgage.
Applying for a mortgage on a fixed-term contract
Applying for a mortgage on a fixed-term contract can be more challenging than if you are on a permanent contract, but it is still possible. Lenders are generally more cautious when it comes to lending to someone on a fixed-term contract, as there is more uncertainty about their future income.
To increase your chances of getting approved for a mortgage, there are a few things you can do:
- Check your credit score: Your credit score is one of the most important factors that lenders consider when assessing your application. Make sure your credit score is in good shape before applying.
- Save for a larger deposit: The larger your deposit, the less risky you will appear to lenders. Aim to save at least 10% of the property’s value.
- Shop around: Different lenders have different criteria for approving mortgages. Shop around and compare rates from several lenders to find the best deal.
- Get a guarantor: If you have a friend or family member who is willing to act as a guarantor for your mortgage, it can increase your chances of getting approved.
- Get a fixed-term contract extension: If possible, try to extend your fixed-term contract before applying for a mortgage. This will give lenders more confidence in your ability to make repayments.
Remember, when applying for a mortgage on a fixed-term contract, it’s important to be realistic about what you can afford. Make sure you can comfortably afford the mortgage payments, even if your income fluctuates during your contract.