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Home Owner Mortgages / Remortgages

A guide to finding the right mortgage deal for you

Are you a contract worker struggling to find a mortgage lender that will accept you? If you’re a contractor, there are some mainstream lenders that actively encourage this type of applicant. Typically, they would work out your income by multiplying the day-rate by five (days) and then 48 (weeks) to get you annual income. You will generally need a history of contract work, although if you have moved to contract work and previously worked in the same line for some time, then this can also be accepted. It’s important to know how each mortgage lender will treat the contract, any gaps in your history and the terms and conditions of this contract. With IR35 rules changing recently, the lender will deem you as employed or self-employed depending how you are treated in the contract. Criteria and rates may differ depending on which category you fall into.

Will I pay a higher mortgage rate if I'm a contract worker?

Not necessarily. If you can provide two- or three-years’ proof of income, it is likely you will qualify for the same rates as an employed applicant (subject to the lender’s criteria and credit score).

Can I get a mortgage with only one year's accounts?

Yes. There are specialist lenders that will consider you,  but their rates may be a little higher due to the perceived extra risk on the lender’s part. This is mainly because you’re providing a shorter track record of your earnings.

I used to be employed but now I'm a contractor, is this a problem?

Not necessarily. Especially if you are at the same company but have just changed the way you are paid, there are lenders who will take a view on this.

How much can I borrow if I'm a contract worker

It’s difficulty to be specific on this point because each lender has a different method of assessing self-employed income. They may use your net profit, salary plus dividends, salary plus net profits, or something else entirely. But generally speaking, mortgage lenders will let you borrow about 4.5 times your income.

Will I need a bigger deposit for a contract worker mortgage?

Maybe. A lot of lenders cap their loan-to-value (LTV) at 75% (i.e. 75% of the property’s market value). Some will lend more, especially if you have a solid track record of accounts, so they’ll use the same criteria as if you were employed

What documentation will I need?

You will need to prove your income in a way that is acceptable to the lender in question. Things they could ask to see might include:

  • Two or more years of certified accounts
  • SA302 forms and Tax Year Overviews for the past two or three years
  • Bank statements – personal and business
  • Accountant’s details
  • Details of any Government loans or grants taken
  • Some lenders will also require evidence of upcoming contracts or contract history

A guide to finding the right mortgage deal for you

Talk to us! We’re happy to chat through the options at any time so please call us on 01923 954777 during office hours. Or you can use our online enquiry form.

Your home may be repossessed if you do not keep up repayments on your mortgage

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‘It really was a pleasure working through things with you... buying an apartment was about as stressful as deciding what takeaway to get.'
‘Alan is a brilliant mortgage broker. He helped me get a great mortgage deal for a recent remortgage for my rental property. He's very patient and knowledgeable and has a lot experience. The whole process was great and I highly recommend him!’
‘Alan is truly exceptional at what he does, his care, advice and knowledge are second to none. My situation isn’t the most straightforward and Alan took the time to find a product that suited. We are no in a position to ‘press go’ when we find what we are after.’
Brilliant service from the advisors at Mortgage Vision, who were able to find me the right mortgage at a brilliant rate. They were extremely helpful and responsive throughout the application process, and were always available and happy to answer any of my queries. 100% recommend.
When something is too good to be true, it is usually not true. Well, not in this case. I have had numerous experiences, dealing for 35 years with mortgage brokers. Mortgage Vision is at the class of its own. Imagine that you do not have to chase the broker, leaving messages and getting her reply a few weeks later. In Mortgage Vision communication extends beyond just giving information. They make you feel reassured and for a good reason. They deliver. I got this last mortgage, Mortgage Vision and my experience was second to none. The best rates, the best advice, the most responsive service you can imagine and the fastest results. I cannot fully hearted recommend this stress free process. A big well done and thank you!
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Your home may be repossessed if you do not keep up repayments on your mortgage or other debts secured on it.

There may be a fee for arranging a mortgage and the precise amount will depend on your circumstances. This will typically be £495.

Mortgage Vision Ltd is an Appointed Representative of Mortgage Force (UK) Ltd which is authorised, which is authorised and regulated by the Financial Conduct Authority. Registered Office: Mortgage Vision, 469 North Western Avenue, Watford WD24 5NX. Registered Company Number: 12577811  Registered in England & Wales.

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