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First Time Buyer Contractor Mortgage
Looking for a mortgage as a First Time Buyer? If you’re a contractor as well it can be a little daunting. But in fact it’s straightforward to find a First Time Buyer Contractor mortgage, especially with a good broker on your side.
Is it harder to get a mortgage as a First Time Buyer Contractor?
Contracting is a well established route for hundreds of thousands of people in the UK, and many mortgage brokers are very well versed in how contractors operate.
Because of that, there are lots of contractor-friendly mortgage products available. It shouldn’t be a problem to find you a suitable deal, especially if you seek the help of a broker. Even some high street lenders welcome customers who work as a contractor.
What does a First Time Buyer Contractor need to consider when applying for a mortgage?
The main thing that contractors should be aware of is that not all lenders are equal when it comes to mortgage deals.
Each lender has their own approach when deciding how much to lend a customer, and for a contractor the difference between lenders can be enormous.
It all depends on how the lender will assess you – as self-employed, looking at your post tax income, as a limited company based on salary and dividends, or as a contractor on your daily rate.
How do I find the most appropriate mortgage as a First Time Buyer Contractor?
This is a complicated part of the market, so it’s much simpler if you appoint a broker to work on your behalf. We can identify the lenders that are most contractor-friendly. These banks and building societies will accept your gross day rate as your income, rather than your post-tax profits as a self employed individual.
That usually means you can borrow more – and sometimes you will get better rates, too.
How will new contractors be assessed for affordability?
Contractor-friendly mortgage providers won’t be phased if you haven’t been contracting for long. As long as you can demonstrate that you have worked in your professional field for a year or two and that you have a contract for at least six months, it should be simple to find you a lender.
Contractor mortgage lenders will generally take your daily rate, multiply it by five (if you work full time) to get a weekly income, and assume that you work 46 weeks a year. That will be the annual income that they work from to calculate the maximum loan. They will also look at your regular outgoings and costs, along with your credit score.
What documents will I need to prepare as a First Time Buyer Contractor?
Your mortgage broker will make sure that you have all the documents you need long before we start on the mortgage application. Typical requirements for securing a mortgage will be details of your current and previous contracts, your credit file, your accounts and tax calculations and three months’ bank statements.
If you’re on a fixed term contract as PAYE, or paid through an umbrella company, you may also need payslips.
How much will I be able to borrow and what deposit will I need?
The total loan will depend on your affordability, which is very personal to you. If you’re applying for a joint mortgage with a friend or partner, that will increase the size of your borrowing via the lender’s mortgage calculator.
When we first meet with you we will explore your situation and give you an indication of how much you can borrow.
The minimum deposit you will need is 5% of the property value, but the more you can put down as a deposit, the lower the repayments on your mortgage will be. If you can contribute a 15% deposit you will unlock more favourable interest rates.
What other advice do you have on First Time Buyer Contractor mortgages?
Getting mortgage advice is by far the easiest way to make sure you get a good-value mortgage as a contractor.
Many lenders only offer their products via a mortgage advisor, and we have access to hundreds of mortgage products. We’ll build a tailored recommendation to suit you, with the lowest possible mortgage monthly cost.
Your first mortgage is a major, long term commitment, so make sure you gain advice. We will also support you throughout the purchase journey – helping you make an offer, get a Mortgage in Principle, chase up solicitors and valuations. Our First Time Buyer customers are always surprised by how much we support you through every step.
Find out more about how we can help you – contact our registered office today, we’ll be delighted to explain more.
Mortgages by Mcateer Ltd is an appointed representative of The Openwork Partnership, a trading style of Openwork Limited which is authorised and regulated by the Financial Conduct Authority.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE
Approved by The Openwork Partnership on 15/01/2024.