Is It Hard to Get a Mortgage as a Contractor

As a contractor, navigating the mortgage process can be challenging. But is it hard to get a mortgage as a contractor? The short answer is no, it`s not hard, but it can be more complicated than for those with traditional employment.

The way lenders assess income can be a hurdle for contractors. Unlike employees, contractors don`t have a fixed salary, which can make it harder to demonstrate a consistent income. However, lenders do understand that contractors have fluctuating workloads and income streams, and they have created specific mortgage products to cater to this group.

One of the solutions available for contractors is a specialist contractor mortgage. These mortgages are designed specifically for those who work on a contract basis, taking into account their unique financial situation. Specialist contractor mortgages mean that lenders can assess your income based on your contract rate and your track record as a contractor. This means if you have a steady income and a good history of contracting, getting a mortgage shouldn`t be too difficult.

Another option for contractors is to provide evidence of your finances over the last few years. This is called self-certification and can be a way to show your income to lenders when your accounts or payslips don`t accurately reflect your earnings. This option has become less common since the financial crisis, but it`s still worth exploring.

Another hurdle contractors face is proving their employment status to lenders. Lenders will want to see proof of your current contracts and may ask for a copy of your client contracts. Providing this information can be time-consuming, but it`s essential to show lenders that you have a consistent income stream.

It`s also important to prepare for the mortgage application process as early as possible. This means getting all your financial documents in order and ensuring you have a good credit score. You should also consider saving for a larger deposit as this can make you more attractive to lenders.

In conclusion, getting a mortgage as a contractor is not impossible, with specialist products and a good credit history, it can be straightforward. But as with any mortgage application, preparation is key. So, if you`re a contractor looking to buy your own home, arm yourself with knowledge and financial records and approach the process with confidence.