Getting a mortgage as a contractor: Is it worth it?
Sufficed to say the answer is yes. The only difficulty you are going to have is finding your self a mortgage that won’t throw you into the deep end. What you need to be doing first off is researching all over the internet and finding the best deal for you. Comparison Contractor is one of the best in the United Kingdom to tell you exactly what you need to know when it comes to contracting and contractor mortgages. So, let us go straight into what you need to know about contractor mortgages in 2020!
Does being a contractor effect getting a mortgage?
There are quite a few myths that surround contracting and one of them has to be contractor mortgages. Luckily, you have the incredible team at Comparison Contractor with you every step of the way to inform you of what is myth and what is fact. So, let us describe these myths in simple terms and explain as to why.
Contractor Mortgage Myths include the following:
“A contractor must have a large enough deposit” – This is one of the most frustrating myths as It seems to just pop out of thing air. Understandably if you have a larger deposit you represent less of a risk to any mortgage lenders and you will receive a bigger competitive mortgage option for you. However, depending on the size of the mortgage you can put down as little as 5% on average and still be assessed by a mortgage lender.
“A contractor must have at least three years of accounts to get a mortgage” A right out lie, as most contractors can get a mortgage based around their day-rate.
A lot of firms now understand that contracting even after IR35 is still incredibly popular. Comparison Contractor has many connections in the contracting and mortgage world which will benefit you immensely if you come on board with us.
“Contractors are seen as a higher risk by banks, building societies and mortgage lenders” This is entirely incorrect as a contractor is of the same calibre of risk as a full-time employee. It all depends on the circumstances of the individual not the entire group. The best way to put this is that your self-employed status isn’t going to put you at a higher risk.
As you might be able to tell from these myths, getting a mortgage as a contractor isn’t exactly the most impossible task. The fairy tales that many people have spread as well as banks about contractor mortgages has been outrageous over the years. But not to worry as Comparison Contractor will always be here to tell you the truth.
Here are a few of our tips on how to secure your contractor mortgage
A good credit score always helps – A credit check from any mortgage lender is something that is normal to come across these days. Of course, missing payments will end up putting a dent in your chances of getting a mortgage, however, this can be expected with most kinds of products you wish to buy over the phone and loans etc.
Making sure that your contractor mortgage is affordable – This might be a no brainer but you would be surprised with how many people take out a mortgage and six months down the line struggle to pay. The reason why is that a lot of people try to stretch themselves as much as possible just to get the property they want. The one thing we would warn is to be sensible when it comes to making repayments as you would want them to be affordable. You also have to be wary of the base rate rising, this could be due to lenders or even the Bank of England.
A higher deposit equals a larger range of choice – As we mentioned briefly, you can get a contractor mortgage for a deposit of less than 5% however, having a much bigger deposit to put down is going to give you a lot more options. Also, interest rates will drop significantly if you can find a bigger deposit to put on the table.
The last tip is why you should use a contractor mortgage specialist like Comparison Contractor – Using your local bank or building society is fine, but you will probably go down the same route as many contractors and find that their rates just aren’t good enough. That is why using contractor mortgage specialists like Comparison Contractor is the best bet for you. We have access to specially negotiated rates with lenders that are understanding to your line of work.
Get in touch with Comparison Contractor today
If you are in need of a contractor mortgage or you would like some advice on the best means to obtain one. Then Comparison Contractor is here for you. Simply fill out one of the many forms on our website and one of our incredible staff members will get back to you as soon as possible.
At the end of the day, we are specialists and we are here to help you get the best deal that you could possibly get. Because we care about your well-being and financial stability.