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.
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