Contractor mortgages guide - Learn how much you can borrow

Contractor mortgage guidelines

It is not necessary to have a prior three (3) year account for a contractor mortgage. There is a myth that a person needs to be in a role for a substantial period. Contractors have been able to put together a mortgage based on the contract rate. It’s not imperative that a contractor needs to prove that he/she has been working for years and also doesn't need to submit accounts for multiple years.

Contractor Mortgages made easy (CMME) has expert mortgage guarantee terms with multiple large lenders. CMME eliminates all the confusion regarding contractor mortgages and works honestly with underwriters to provide the desired result. These help to arrange mortgages based on the contract, and not based on the number of years an individual has been working as a contractor. The only supporting documents are identification proof, bank statement, and copy of the contract.


Working through a contractor mortgages specialist

The easiest way is to work through a contractor mortgage consultant like dns accountants. People take for granted that finding a specialist is an easy task whereas, they are unaware that the majority of the bank staff or agents are not familiar with the contracting market. Hence, individuals don’t get the exact information they desire regarding contractor mortgages. Lenders who are familiar with the contracting space will not consider parameters like high risk; rather will approach it in a similar manner as for a full time employee. The bank staff might not have accurate information regarding this! If an individual’s credit rating is acceptable and they have a deposit, then the individual is classified as a low risk borrower and is eligible for a mortgage amount of four times the contract rate. dns accountants have developed a relationship with CMME and CMME has negotiated mortgage specialists that help with the processing of the documents.

Avoiding branch staff, who are not clear about the proceeding and rather speaking to chief mortgage underwriter, through CMME, an individual is assured that the mortgage application is processed faster and without any hassle.

Contractor mortgages guide - Learn how much you can borrow

Maintaining a deposit for contractor mortgages

Nowadays, the best rates are offered to individuals who have a deposit. Having a deposit of around 10%-25% is considered ideal. In case, an individual has not managed to maintain a deposit, or does not have an accessible property that is worth more than the amount initially paid for it, the individual will still be able to get a mortgage but at a higher rate. More the deposit amount, lower the rates of mortgage and lower repayments.


Maintaining credit rating for contractor mortgages

Application can get rejected if an individual does not have a decent credit rating, despite having a good income and decent deposit amount. Lenders are very strict when it comes to credit ratings especially because of the current economic scenario. Hence, it is imperative to have an exceptional credit rating to get a clean chit from mortgagers. Even activities like missing a single credit card payment or not updating the electoral roll before moving a house makes a lot of difference.


Up to date contracts

An individual needs to have a copy of all the signed contracts. The signed contracts must clearly state the length of the contract and the contract rate. CMME uses this information to support the mortgage application. This is used as a substitute to producing references or three (3) years of accounts.


Setting a limit

It is imperative that an individual is realistic about the mortgage repayment he / she can afford to pay every month. It sometimes happens that, based on the contract rates and other documents, the amount offered by a lender can have a high repayment value that an individual might not be able to afford. It is important to appreciate that interest rates are a variable component and if the amount revised is on a variable rate, repayments can end up being affordable. The expert advisors at CMME can help individuals to find a suitable mortgage that meets the current needs as well as keeping the future in account.


IT contractor mortgages

The moderately high income that an individual enjoys can be used to raise higher amounts of capital than was possible through a permanent wage. This should give an individual an opportunity to afford a better place to stay than the case in a salaried position. It could also offer the opportunity to buy a second property to rent out thus building up further potential assets. Even post-IR35, individuals may still have a low salary and high dividends, and end up staying in a garage if it was left to their standard lending policy! A fundamental issue is that, in spite of IR35 , the mortgage companies are often suspicious of the short-term nature of the contracts and apprehensive that an individual may not get an extension or new contract. However, there are lenders who approach this in a different manner, and despite the contractor tenure, are able to process the mortgage. Each time a mortgage is applied for, a comprehensive credit search is carried out. If the credit rating is not up to the mark, there is a high possibility that the application may be declined because of the activities against an individual’s records.


Contractor mortgages consultants – dns accountants

A high-quality IT contractor accountant will focus on the bigger picture and pay attention to the minute details as contractor mortgage lenders, contractor mortgage Amounts, contractor mortgage contract Rates. dns accountants use the bigger picture to plan the entire year’s activities to ensure that the business/contractor pays the minimum amount of tax and claim the applicable allowances and benefits. We advise small-businesses/freelancers and contractors on issues regarding business growth, taxation, and refer business/individuals to strategic associates such as insurance advisors, and mortgage specialists.

dns accountants is a skillful team of accounting and taxation professionals that helps clients with services ranging from acting as contractor mortgage consultants to business set-up advisors. The firm helps owners manage small business and private individuals across the United Kingdom. dns is an acknowledged firm of ACA’s or Chartered Accountants (CA) and the firm takes pride in saying that we are very helpful to our clients & deliver unparalleled client service and persistently help clients to handle their wealth. The firm’s learned team focuses on helping sole traders with business registration, tax filings and other services such as self-assessment, payroll management and bookkeeping. At dns, we are constantly in touch with our clients and offer

  • Fixed price service
  • Consistent and transparent service
  • Certainty on tax base and taxation advisory

Other services

dns accountants offers taxation & accounting services to owner-managed-businesses or self employed individuals / freelancers / contractors. For business owners and freelancers / contractors, it is difficult to keep pace with the ever changing government regulations and rules. Our expert team of accountants for contractors and taxation professionals help clients in services ranging from bookkeeping to payroll to tax planning, and filing tax returns. dns accountants help clients focus on maximizing their wealth.

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Get the best advice on tax savings, accounting services, payroll, self assessment, VAT and more, whether you want to call us directly, request a call back or chat online with our experts, rest assured that we will always give you the best advice.If you have any questions, or would like to speak to us in person, please do get in touch. We're here to help.

Head Office:

dns accountants
DNS House, 382 Kenton Road,
Harrow, Middlesex, HA3 8DP

Contact Number:

0333 060 2437


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