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The remortgaging sector is about as competitive as the mortgage market gets. For contractors and freelancers, it’s no different. In theory.
If you’ve proven to a lender you’re good for the investment before, surely they’ll want your business again?
Maybe. But when and how you took out your original mortgage will play a part in what’s available to you now. If you had an interest-only or self-cert mortgage, as was the choice for many self-employed, chances are you’ll have to contend with a new payment vehicle.
Self-cert has gone, kaput! Interest-only is available, but only through select lenders and with strict criteria. Repayment mortgages are the norm, with a choice of standard or variable interest rates. So, where does that leave you now you want to remortgage?
If you’ve had no blips since taking out your first mortgage, you’ve already proven you can make regular repayments. This, in a lender’s eyes, makes for low risk business. And they want it. With responsible lending still very much en vogue, it stands to reason.
But contractors and freelancers can still hit a brick wall when they want to remortgage. Even if they have a blemish-free repayment record, the non-permanent nature of the way they work heightens their risk in some lenders’ eyes.
Part of the issue is that many contractors are shifting from interest-only to repayment mortgages. But the biggest single factor is that High Street lenders don’t get how contracting works.
Why can’t High Street lenders accommodate contractors and freelancers?
Given that you’re self-employed, your time is very much your money. The last thing you want is to have to overcome nonsensical hurdles that encroach on your time.
Time spent at your local branch can be frustrating. Their advisers don’t recognise that, even though your take home pay is low, you earn and retain a considerable income. Even if it is through your limited company.
The fact that not understanding the way you work is not all their staff’s fault is no comfort to you, whatsoever. Most lenders have strict affordability criteria to which your ‘salary’ must adhere.
Rather then encompass everyone, most lenders build those calculations around PAYE. Anything beyond that calls for in-depth specialist knowledge.
But unless you’re an Umbrella contractor, PAYE has long since been a thing of the past for you. So, what’s the answer?
You need a broker who not only understands the mortgage market, but who also gets contracting. Moreover, one who can match your contractor status to a competitive mortgage and complete it for you. That’s where we come in.
Home-mover mortgages for contractors: they’re not rocket science
If you think this situation is new, think again. High Street lenders have consistently failed self-employed people of all trading structures for years.
What we set out to achieve was to find out at which point(s) the process collapsed and add our support there. Some mortgage providers still won’t entertain contractors and freelancers. Despite our reasoning, they still see self-employed people as too high a risk. Others, however, have been much more understanding. But we must stress, the service we provide is seldom available at branch level.
Rather than waste ours and our clients’ time, we’ve negotiated deals with the underwriters. They realise that contracting – and its related accounting – remains a bespoke niche. They’re more than happy to let specialist brokers process such applications.
The result is a process that extracts elements from contracting critical to moving home. Then packaging that information in a way that underwriters can grasp in an instant. The endless accounts advisers may have asked you for at branch level? They’re just not necessary.
This is what an adviser should offer to contractors and freelancers looking to move up (or down) the property ladder:
- an agreement in principle within 24 hours;
- mortgages up to and including 95% of the home’s purchase price;
- a reduction in interest rates for a greater deposit at your disposal;
- affordability calculations based on your contract rate, not your take-home pay or accounts;
- a range of mortgages that come with discounted or NO set-up fees, dependent upon the lender;
- updates on your application all along the process, should you ask fro them;
- the ability to secure a new mortgage even if you’re approaching the end of your current contract.
This, in our opinion, is both achievable and should allay any fears contractors have about moving home.
In our experience, High Street lenders are all too quick to grant an AIP. But they’re not so hot on completing mortgages for contractors and freelancers.
This can give a false impression to the contractor in question about their affordability status. A failed credit search can also harm their chances of getting a mortgage with an amenable lender later on.
Who can qualify for home mover mortgages?
C&F Mortgages caters for all types of independent professional. If you’re a freelancer, limited company contractor or Umbrella worker, we have a solution for you.
As well as getting to know you and your business in a meaningful way, we offer:
- savings of up to £500 on your home-mover mortgage admin fees;
- unbiased, whole-of-market selection of mortgages; we’re 100% independent;
- tailored underwriting terms with every contractor-friendly lender in the UK;
- as we cut down on unnecessary documents, we offer a swift turnaround from application to completion;
- access to essential mortgage protection and illness insurance policies;
- advisers who understand your circumstances as they are freelance, too.
Many websites offering home-mover mortgages for contractors and freelancers are affiliates or tied-in brokers. They forward your application to a lender from whom they earn a commission and that’s the extent of their involvement.
C&F Mortgages is a registered broker with genuine advisers at the end of the phone. If you’ve got a question, they can answer it for you.
If you’re self-employed and looking to move home, choose a broker who’ll be with you for the entire journey. And who’ll be there in the future when you’re ready for that next step up the property ladder. We’ve got your bases covered.
Here’s what you need to do next.
Simply call us on 0208 421 7788 or click on our Request a free quote button below and we’ll start searching for the best contractor mortgage for you.