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It is becoming increasingly difficult to get a mortgage as the economy fluctuates and, unsurprisingly, many contractors will be wondering how this might affect their chances of securing a mortgage in the future, or indeed what steps they need to take now to start the process.

We’ve put together some handy tips for you, including how you can find the right mortgage product from the start – and the mistakes you need to avoid making.


Use a mortgage broker that is specific to contractors

It may seem a little obvious, but a lot of contractors try to use high street lenders and banks when applying for a mortgage. A lot of those lenders and banks are not really tailored to contractors’ needs and work pattern. Many of them are not familiar with the contracting lifestyle or how it works. It is evident that they tend to be geared towards permanent employees as demonstrated by most application forms only covering details of an applicant’s  employer, how long they have been employed there and at what salary.

By using a specialist contract mortgage broker, you can find rates tailored to you, i.e. based on your contract/daily rate and not on years of service/annual salary in a permanent position. A specialist broker will also be able to help you with the application form, having dealt with lenders and banks for many other contractors in the past.


Keep your contract handy and up to date

Without a doubt, any contractor mortgage you’re looking to get will require an up-to-date, signed contract from your current position. This will clearly demonstrate the length of the contract and your daily rate, which cuts out time and trouble for the lender rather than them having to chase up this information. At The Contractor Mortgage Company we keep your contract history in a secure, multi-encrypted protected server (we keep it safe basically) so if you ever need it, we’ll be able to provide it your lender in no time at all.


Browse the various providers

Again, this may seem like an obvious thing to do but we know, in this day and age, circumstances can change at a drop of a hat. Take a close look at the T&C’s and make sure you can afford to keep up with payments should your contract end or your day rate change. Take the time to shop around and find the best deal for you and compare what works best for your circumstances.


Keeping your financial status in tip top shape

Although you may have a vastly higher income or take home rate compared to permanent employees, the same rules still relate to you when applying for a mortgage. Even having a sizeable deposit, you may find your credit rating could result in your mortgage application being denied. ‘Stress tests’ (where lenders see if you can afford the repayments if your circumstances change) are becoming more difficult so it’s key to demonstrate you are financially stable and able.


Watch out for the hidden insurance conditions

As with any financial product you’re buying into, there tends to be some obscure, hidden insurance clauses that add a dollop of cost onto your end mortgage payment. Check what the insurance actually provides (as it may not be much) and also check with your payroll provider as mortgage protection may be part and parcel of what you’re getting already.


Don’t know where to look and who to speak to? Give us a call! We’ve helped our customers find the right mortgage product and generally helped them to get into a better financial position!