Can contractors get a mortgage?

Yes, contractors can obtain a mortgage, provided they meet the lender’s eligibility criteria. Mortgage providers recognise the unique circumstances of contractors and have specific policies tailored to their employment status.

Mortgage criteria and eligibility

Lenders typically assess contractors based on their track record of consistent earnings, the remaining duration of their current contract, and the likelihood of securing future contracts. Factors like credit score, deposit size, and overall affordability also play a role in determining eligibility.

What type of contracting work do mortgage lenders accept?

Most lenders accept contractors working in various industries, including IT, engineering, healthcare, and construction. However, they may have specific requirements regarding the type of contract, such as favouring renewable or rolling contracts over fixed-term agreements.

What documents will I need to provide?

Contractors will typically need to provide the following documentation:

– Copies of recent contracts or contract renewals
– Evidence of earnings (e.g., payslips, tax returns, or accounts if self-employed)
– Proof of future contract opportunities or contract extensions
– Identification documents and proof of address

Can I get a mortgage if I’ve recently become a contractor?

It is possible to secure a mortgage as a new contractor, but lenders may impose stricter criteria. They may require a longer track record in your field, a higher deposit, or evidence of a significant contract pipeline to mitigate perceived risks.

How to get a mortgage as a contractor

Here are some tips to improve your chances of obtaining a contractor mortgage:

1. Build a reliable income history as a contractor, ideally spanning two years or more.
2. Maintain accurate financial records and be prepared to provide evidence of your earnings.
3. Approach lenders that specialise in contractor mortgages or have dedicated underwriting policies for contractors.
4. Consider using a mortgage broker with experience in arranging contractor mortgages.
5. Be prepared to provide a larger deposit, as lenders may require a higher percentage to account for perceived risks.

Remember, mortgage lenders assess each application on a case-by-case basis, considering factors such as your specific circumstances, credit profile, and overall affordability.