Sourcing a mortgage in today’s economic climate is becoming ever harder for a range of different people. One particular group that stand out are IT drywall repair spokane wa, this is because they don’t fit the standard mould for most high street lenders lending criteria. With so many more Contractors applying for a mortgage, a number of lenders are now to reviewing their standard lending criteria in order to take into account the complex trading structures and payment mechanisms that contractors use.
Contractors in the UK are now seeking the help of a number of Contractor Mortgage Specialist in order to assist them with their mortgage application. A handful of these mortgage brokers have negotiated specialist underwriting terms with a number of high street lenders in order to ease the path for contractors trying to obtain a mortgage. These mortgages are commonly referred to as contractor mortgages. A contractor mortgage is one were the lender uses the contractors daily or hourly rate to assess their relevant earnings. What this means is that contractors needn’t rely on providing 3 years accounts, which often doesn’t reflect your affordability. That’s especially great news for contractors that have only recently started contracting and don’t yet have accounts. Essentially this means that a mortgage lender will assess you on your gross contract earnings instead of your physical salary and dividends drawings.
Each lender has their set of rules and criteria for assessing contractors. Some only wish to consider applications from IT contractors, these mortgages are known as IT Contractor Mortgages and others are willing to consider contractors who work in other industries such as Finance and accounting, Oil & Gas, Engineering and so on. One particular factor that lenders will look at is the length of the duration of the contract. Most lenders want contractors who are on a minimum contract of six months and have a minimum of 3 months remaining. Northern Rock is particularly strict as they want contractors who have been contracting for a minimum of 12 months. Some lenders will consider mortgages for contractors who are on their first contract. All of the above factors fundamentally measure a contractor’s employment stability.
Many contractors are surprise to learn that they can get the same mortgage rates from high street lenders as their employed counterparts. Except that they can normally borrow more as they are being assessed on their gross annual contract income.
For example, a contractor paid on a £65/hr operating through his own limited company can earn £10,000 a month. Lenders will multiply this by 12 to assess his annual earnings (£120,000) and then apply their affordability calculator which on average is a multiple of 4 x gross earnings, potentially allowing you to borrow up to £480,000.
