95% Contractor Mortgages Brokers
Contractors used to have a lot of problems getting mortgages at all, never mind 95% contractor mortgages.
In the old days, banks and building societies were very cautious about giving IT contractors mortgages as they didn’t have safe, regular income.
If you walked into a high street bank, or building society, they would want to see three years worth of accounts – whch would mean you had to have had a contracting record of almost four years before you could get a mortgage.
They also worked out your offer based on your Director’s salary. IT Contractors know that they keep this deliberately low to take their money in dividends which is more tax-efficent.
You would have been better to apply for a mortgage while you were still a permanent employee. However, by the time that a person reaslises that it is already too late.
I say that this is the way it used to be when I started contracting but it is still the way that most building societies and banks operate today as regards IT Contractors.
Specialist Contractor Mortgages Brokers
The difference today is the advent of specialist contractor mortgage brokers. These only date back about 10 to 15 years.
They convinced one bank, and then others, that they should dip their toes in the water and loan money to a few contractors for them to buy properties.
They did so and it worked out well, so they loaned money to more contractors through specialist brokers.
They found that contractors paid back the money as well, if not better, than other people – and they seldom defaulted on their mortgages.
IT Contractor Mortgages
This led to a burgeining market in contractor mortgages and the specialist contractor mortgage brokers managed to convince more and more building societies and banks that loaning money to IT Contractors was as safe as, well, houses.
What’s more, contractors who go through the specialist brokers no longer need to furnish three years worth of accounts. All they need to produce is their contract.
Indeed, it is possible to get a mortgage offer on the very first day of your first ever contract as they have streamlined the process so much.
Another bonus is that the offer is based on a contractor’s daily rate annualised. It bases that on the contractor working 48 weeks a year.
So, if you got £500 a day, you would earn £2,500 a week. Multiply that by 48 and you have £120,000. You would then get an offer of maybe 4 times that which is £480,000.
So, you would be able to afford a property worth over half a million when you add your deposit.
Indeed, the specialist mortgage brokers can often get contractors interest rates better than the market rates.
Of course, the more you put down as a deposit, the lower the interest rate you will get.
95% Loans for Contractors
However, specialist mortgage brokers are able to get contractors up to 95% loans meaning they just have to put down a 5% deposit.
There have been instances when first time contractors have been able to move into their dream houses just two weeks after starting their first ever contracts.
To find out more information about this, or to apply for 95% contractor mortgages, just fill in the form below and a specialist contractor mortgage broker will be in touch.