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7 Contractor Mortgage Myths Debunked
Contractor Friendly Mortgages
One of the biggest fears we happen to have when it comes to applying for a
mortgage is being rejected. As a contractor, you tend to have that constant worry
where having no permanent work becomes a problem in applying for loans, more
so mortgages. However, in reality, you are worrying about nothing more than just
myths. You’ve probably heard about various beliefs about applying for a mortgage
but here is some professional contractor mortgage advice in the UK that you
will find very helpful.
Contractors need a minimum deposit of 50% to get a mortgage approved
Completely false. The minimum deposit is 5% of the value of the property and
beyond that is optional. If you have 70% of the payment at hand, it will do you a
great deal of good to give it as a deposit to get a lower rate and a more flexible
policy.
Banks, lenders, and lending institutions label contractors are high risk
Absolutely wonky! Whether you are a contractor or a permie, a bad credit score or
rating is what will label you as high risk. Since there is a growing number of lenders
who are contract-worker-friendly, they are more understanding and lenient giving
better chances for contract workers such as yourself to get a loan.
Self-employed retirees are not allowed to get a mortgage
No, no no! For as long as you are still getting paid (either through your pension or
other means) provided that you have documents to prove your account, you may
still get a mortgage even if you are already retired.
Contractors pay higher premiums or mortgage rates
Rubbish. Most lenders do not discriminate against contract workers. Generally, the
same rates are offered to the contract and permanent workers. Most rates depend
on how large your deposit is. With larger deposits, you will surely get lower rates.
Contractors get rejected because they do not have referrals or references
There is no such thing! Contractors may have different requirements, but none of
them include references. Though it might help boost your application, it is not a
requirement by most lending institutions to get references.
Contractors cannot apply for a mortgage if they have less than six months
of contract work
Not true at all. As long as you have a credit score, you can definitely file for a loan.
Mortgage applications for contract workers get approved only with three
years of accounts worth
Lies, lies, lies! Contract workers get as much as five times their daily rate. Most
lenders work with your daily rate and adjust accordingly. To get better offers, let us
do the tiresome work for you. We specialize in giving contract mortgage advice in
the UK, and every self-employed or contract worker problems are ours to deal with.