Trading accounts is often the main reason for contractors having their mortgage applications declined. Don’t even waste your time going directly to the high street lenders, the mortgage loan offered will be based on just the Taxable Element of your income.
Qdos has teamed up with Freelancer Financials, a specialist firm of financial advisers, who have spent the past ten years helping contractors secure competitive contractor mortgages. Freelancer Financials are able to secure you a mortgage based on a multiple of your contract earnings alone.
In terms of the actual mortgage deal, NONE, there is absolutely no difference. The same mortgage deals available to PAYE applicants, is also available for contractors. The only difference that separates the two is the underwriting process and assessment criteria.
With a standard mortgage, high street lenders and building societies will typically assess your affordability based on salary and dividends drawn. The majority of contractors operating in a tax efficient way draw a minimum salary and restricts dividend drawings to avoid higher rate tax. Although this is great from a tax planning perspective, it sadly has the undesired effect of reducing what you can potentially borrow under the standard criteria used by high street lenders.
A contractor mortgage is based on your gross annual contract earnings. This enables you to borrow substantially more than you would if applying with trading accounts.
For more details or a free quotation from Freelancer Financials please complete our Online Mortgage Quotation form and someone will be in touch shortly.
Please note that this type of underwriting is completely different to the self certification mortgages that were available in the past.
Contractor mortgages are no more costly than the mortgage loans sourced by permanent employees as long as you seek the assistance of a contractor mortgage broker that is experienced in working with contractors. They have the knowledge and contacts with the underwriters who will be responsible for assessing your mortgage application.
Before attempting to apply for any type of mortgage borrowing we strongly recommend that you speak with Freelancer Financials first.
Freelancer Financials are able to utilise bespoke underwriting with the lenders, to offer you borrowing based on a multiple of your entire contract earnings and not just the Taxable Element.