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Our Advisors understand exactly which lenders to approach and how to best position your circumstances to them when applying for a residential contractor mortgage.
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 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 Ashby has recently taken a new contract role inside IR35 through an Umbrella Company having always previously contracted through his own Limited Company outside, IR35. His day rate has remained the same, £500 per day and he still works on a contract basis with a start date and end date but he is now classed as PAYE. He is paid weekly and since he started the contract 2 months ago, he has taken a few days off here and there so not all of his payslips show the same gross/net income.
The way his pay is structured through the Umbrella Company is not straight forward either with some of his pay detailed as a basic income and the rest of it as overtime and commission.
He currently has a mortgage with Halifax but his existing fixed rate is coming to an end shortly. He saw his Bank, HSBC were offering some attractive mortgage rates at the moment so booked an appointment in branch to speak to a Mortgage Advisor to apply for one of these new rates.
The Mortgage Advisor took a look at the payslips and noted there were differences in the weekly pay over the last 2 months which led to them asking to see a copy of his PAYE contract. Once they realised he was not permanently employed they advised him that they would treat him as a temporary contractor and require 12 months’ worth of payslips, something he was unable to provide having only started this role 2 months ago.
Mr Ashby realised that getting a lender to understand how he works and how he is paid may not be as straight forward as he had initially thought so approached Contractor Mortgage Finder who arranged for a fully qualified Contractor Mortgage Specialist to help him. After an initial 10-15 minute chat the Advisor found Mr Ashby a suitable mortgage from a contractor friendly mortgage lender who could simply use his contract as evidence of his income and didn’t need 12 months’ worth of payslips. Furthermore, the rate the Advisor was able to get him ended up being slightly better than the rate he had initially seen with HSBC!