Trading accounts is often the main cause for contractors having their mortgage applications declined. Don’t even waste your time going directly to the high street lenders, the mortgage loan offered will be based on just the Taxable Element of your income. Freelancer Financials are able to secure you a mortgage based on a multiple of your contract earnings alone.
How do they secure your mortgage?
They make use of the knowledge and contacts built up over several years of specialising in this niche market. They have the knowledge and contacts with the underwriters who will be responsible for assessing your mortgage application.
How does a contractor mortgage differ from a traditional mortgage?
In terms of the actual mortgage deal, NONE, there is absolutely no difference. The same mortgage deals available to PAYE applicants, is also available to contractors. The only distinction that separates them is the underwriting process and assessment criteria.
With a standard mortgage, lenders and building societies will typically assess your affordability based on salary and dividends drawn. The majority of contractors operating in a tax efficient way draw a minimum salary and restricts dividend drawings to avoid higher rate tax. Although this is great from a tax planning perspective, it sadly has the undesired effect of reducing what you can potentially borrow under the standard criteria used by high street lenders.
A contractor mortgage is based on your gross annual contract earnings. This enables you to borrow substantially more than you would if applying with trading accounts.
Please note that this type of underwriting is completely different to the self certification mortgages that were available in the past.
These mortgages are no more costly than the mortgage loans sourced by permanent employees as long as you seek the assistance of a contractor mortgage broker that is experienced in working with contractors. Before attempting to apply for any type of mortgage borrowing we strongly recommend that you speak with Freelancer Financials first.
PaperRocket Accounting, have teamed up with Freelancer Financials, a specialist firm of mortgage advisers, who have spent the past ten years helping contractors secure competitive mortgages.
Freelancer Financials can help you find the right Mortgage based on your Contractor status!