We are always looking at ways to help make our contractors lives easier. Becoming a contractor offers you freedom, flexibility and financial benefits, but it can come with some difficulties, including getting a mortgage.
We have been talking with our partner CMME and asked them to give us some tips on what you can do to prepare for buying a new home. CMME have helped thousands of contractors get the mortgage they deserve, and can help you unlock your true borrowing potential based on all your sources of income.
USE A SPECIALIST BROKER
Most lenders have little understanding about the contracting market, and as a result, their standardised procedures do not accommodate contractors. We have agreed bespoke underwriting agreements with a comprehensive range of lenders, enabling us to secure mortgage funding based on a multiple of your contract rate alone.
KNOW YOUR MINIMUM DEPOSIT
The minimum deposit needed for a mortgage is 5%. Lenders tend to favour individuals who have higher deposits, but this is true to anyone looking for a mortgage and not just contractors. To access the most competitive rates you should be aiming to save anything between 10 and 25%. There are mortgage options out there for less than that, but they will be on a much higher rate.
MAINTAIN A SPOTLESS CREDIT RATING
Lenders have become increasingly risk-conscious and are always on the lookout for possible reasons not to lend. A good deposit and a satisfactory income is often not enough to secure a mortgage. That is why it is essential to keep your credit rating up to scratch, leaving the lender no reason to turn you down.
UPDATE ALL RELEVANT PAPERWORK
You will need to provide minimal documentation to support your application. Ensure your CV is up to date as it will be used to prove your skills and experience. You will also need to obtain a copy of your current contract as this will be used to demonstrate your earnings and the last 3 months personal & business bank statements to show income and expenditure. Using these documents we can avoid any issues to do with affordability.
USE YOUR MORTGAGE ADVISOR TO GET AN OFFER ACCEPTED
When you are presented with your Agreement in Principle it is important to use it for your own reference rather than for the Estate Agents. When making an offer that is not the full amount, we recommend contacting us to amend the figure on your certificate to match the offer, this way you are not revealing your negotiating position. If an estate agent knows how much you can afford, they may attempt to secure a higher offer on behalf of the vendor.
CMME have also created a really useful guide to obtaining a mortgage as a contractor.
Momenta are not authorised to offer regulated mortgage advice. Momenta are introducers to CMME.
Your home may be repossessed if you do not keep up repayments on your mortgage.
CMME is a trading name of CMME Mortgages and Protection Limited. Authorised and regulated by the Financial Conduct Authority (FCA reg. 414798). Registered in England No. 04886692. Registered Office: Albany House, 5 Omega Park, Alton, Hampshire, GU34 2QE. Please be aware that Commercial Mortgages, Overseas Mortgages and some Buy To Let Mortgages are not regulated by the Financial Conduct Authority. Calls may be recorded for training and security purposes and to improve the quality of our services.