How much could you borrow?
Our Advisors understand exactly which lenders to approach and how to best position your circumstances to them when applying for a contractor mortgage in london
Whether you are PAYE through an Umbrella Company or contracting through your own Limited Company, a specialist Mortgage Advisor with the right knowledge and contacts can not only make the difference between you getting a mortgage in London or not, but they also ensure you will obtain the best interest rate available to you.
Forget the need for Limited Company accounts, tax returns, SA302s, Tax Calculations and Overviews or payslips, a Contractor Mortgage is usually obtained by using your contract as evidence of your income and your hourly, daily or weekly rate is annualised over a set number of weeks per year to become your income for mortgage purposes. It is a vastly simplified way of evidencing your contractor income to secure the mortgage you need, be it a remortgage or a property purchase.
CASE STUDY
Mr Bhat has been a contractor working in London for around 6 years and currently contracts outside of IR35 through his Limited Company which he set up when he started contracting. He is looking to move home to buy a property in a local school catchment area for his children in London and has recently listed his property for sale and subsequently found a buyer. He got in touch with Contractor Mortgage Finder after he had spoken to another broker who explained to Mr Bhat that unfortunately, he simply couldn’t afford the mortgage he would need to buy the new property which was more expensive than his current property. The original broker he spoke to spoke to advised Mr Bhat that as lenders will review the income he has taken through his Limited Company (salary and dividends), his maximum borrowing would be capped at £325,000 as his salary and dividends totalled £65,000. Mr Bhat was hoping to be able to borrow quite a bit more than this as he was looking at properties of £800,000 and would have £200,000 from the equity in his current property being sold to put down as a deposit so needed a mortgage of £600,000. Mr Bhat is on a contract rate of £650 a day.
Contractor Mortgage Finder put Mr Bhat in touch with a specialist Contractor Mortgage Advisor who took the time to understand Mr Bhat’s circumstances and requirements. They explained that this was a common scenario with mortgage brokers who do not have Contractor Mortgage knowledge and that they focus entirely on the fact that Mr Bhat is a Limited Company Director rather than looking at the fact that he is also a contractor and the Limited Company is really just a method of remuneration for his contract role.
The Mortgage Advisor Contractor Mortgage Finder put Mr Bhat in touch with explained that there are Contractor friendly mortgage lenders who could look at his income in a slightly different way and ignore the Limited Company accounts, much rather working with Mr Bhat’s current contract instead. Using Mr Bhat’s current contract as proof of income would enable Mr Bhat to borrow close to £750,000 which was more than enough to cover the £600,000 he was looking to borrow. The process was very simple and quick and within 2 weeks of finding a suitable property to purchase Mr Bhat had the mortgage offer from the lender the Contractor Mortgage Advisor had recommended, in his hand! All Mr Bhat had to provide was a copy of his current contract, no Limited Company accounts, no SA302’s/Tax Calculations or tax returns. Furthermore the rate Mr Bhat was recommended by the Advisor was incredibly attractive and the Advisor was on hand at every step of the process to answer any questions Mr Bhat had as well as keeping Mr Bhat informed of the progress of the application at every stage.