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It is becoming increasingly difficult to get a mortgage as the economy goes up and down, and unsurprisingly, many of you contractors will be wondering how this might affect your chances of securing a mortgage in the future, or indeed what steps you need to take to start the process.

We’ve put together some handy tips for you, including how you can get the right mortgage product from the start – and the mistakes you’ll need to avoid.

Use a mortgage broker that’s specific to contractors
It may seem a little obvious, but a lot of contractors try to use high street lenders and banks when applying for a mortgage. A lot of those lenders and banks aren’t actually tailored to their needs and lifestyle. Many of them aren’t familiar with the contracting lifestyle, or the details of how it works. It is evident that they tend to be geared towards permanent employees, as many application forms only cover who your employer is, how long you’ve been there and what your annual salary is.

By using a specialist contract mortgage broker, you get rates tailored to you i.e. based on your contract/daily rate and not years of service/annual salary in a permanent position. A specialist broker will also be able to help you on the application form, having dealt with lenders and banks for many other contractors before you.

Keep your contract handy and up to date
Without a doubt, any contractors mortgage you’re looking to get will require an up-to-date, signed contract from your current position. That way it can clearly demonstrate the length of the contract and your daily rate, which cuts the hassle and time for the lender to go chasing after this information. At Appytech we keep your contract history in a secure, multi-encrypted protected server (we keep it safe basically) so if you ever need it, we’ll be able to provide it your lender in no time at all.

Browse the various providers
Again, it may seem like an obvious thing to do but we know in this day and age, circumstances can change at a drop of a hat. Take a close look at the T&C’s and make sure you can afford to keep payments up should the contract end or your pay rate changes. Take the time to shop around and find the best deal for you and compare what works best for your circumstances.

Keeping your financial status in tip top shape
Although you may have a vastly higher income or take home rate compared to permanent employees, the same rules still apply to you when applying for a mortgage. Even having a sizeable deposit, you may find your credit rating could result in your mortgage application being denied. ‘Stress tests’ (where lenders see if you can afford the repayments if your circumstances change) are becoming more difficult so it’s key to demonstrate you are financially stable and able.

Watch out for the hidden insurance conditions
As with any financial product you’re buying into, there tends to be some obscure, hidden insurance clauses that add a dollop of cost onto your end mortgage payment. Check what the insurance actually provides (as it may not be much) and also check with your payroll provider as mortgage protection may be part and parcel of what you’re getting already.

Don’t know where to look and who to speak to? Give us a call! We’ve helped our customers find the right mortgage product and generally helped them to get into a better financial position!

Posted in Finance, Knowledge On September 6, 2016