it contractor mortgage
Your home may be repossessed if you do not keep up repayments on your mortgage
Securing a mortgage as an IT contractor is not easy if you apply alone, thus we have gathered some top tips to assist you on your process. We can aid you avoid the hassle associated with getting a mortgage in a volatile lending market. Always remember that lenders take a risk-averse approach and only accept what they consider to be an acceptable risk in term of borrowers. Here are the top tips for getting IT contractor mortgages.
Use contractor mortgage professional
It is quite easy to think that you can go out there and get the best mortgage deal without help. The problem is that majority of call center agents or bank staffs aren’t familiar with the IT contracting world. This means that contractors tend to fall outside of theiracceptable script’ when it comes to requesting for documents such as worker’s details, employment letters and so forth. By avoiding people or staffs who aren’t trained to handle your unique situation and talking to main mortgage underwriters who understand your situation, you can ensure that your mortgage application is hassle free and fast.
Understand your minimum deposit
In most situations, the minimum deposit required for a mortgage is 5 percent. However, lenders often favor people who have higher deposits and this is true to any person looking for a mortgage, not just IT contractors. To be offered the most competitive rate, you should be willing to deposit at least 10 percent. There are IT contractor mortgages alternatives in the market which are lower than this, but have a higher interest rate.
Keep your credit rating clean
Despite a sizable deposit and a good income, your mortgage application could still be denied because of poor credit rating. Lenders are becoming stickier than before due to the current economic situation, so it is best to avoid situations that might make them say no. This mean it is important to keep your credit score as high as possible.
Use mortgage advisor to get a deal
When you are offered or presented with the Agreement in Principle, it’s advisable to use if for your own benefit as opposed to that of Estate Agent. When making an offer that isn’t the whole amount it is important to visit your lender so that they can adjust the figure on your certificate. If an agent knows the amount you can afford he might attempt to get a higher offer for the sake of the vendor.
Ensure your contract is updated
An IT contractor will need to have a copy of his signed contract to present which should be up to date. The contract should state the duration of the contract, and the current contract rate. IT contractor mortgage made easy! Use this info to support your application and save yourself the hassle of having to produce 3 years of accounts and references.
Remember company’s money cannot offset your mortgages
IT contractors can have huge amounts of money during the year comprising of money saved for income tax, VAT and corporation tax. But this buck belongs to the company and not to the contractor. However, this should not stop you from using this type of loan as you can link your current and savings accounts to reduce your IT contractor mortgage interest.
Don’t give up
Never give up when looking for IT contractor mortgages. There are a lot of lenders who are friendly to contractors, offer good deals, have flexible payment plans and have sympathetic lending criteria. You can get up to four and half times you annualized contract rate and only need to have worked for one day. It’s possible to get mortgage with little deposit but better deals are always on offer for people who have at least 10 percent or more deposit.
It is vital you ask a potential lender how often they change the interest of the outstanding mortgage. Some lenders might change the rate only once per years, for instance December 31st and a lump sum paid in January might accrue interest for the next 12 months until you realize that you don’t owe the lender anything. In other kinds of businesses this is illegal but in the world of mortgages, it is very legal. Go for lenders who recalculate at least once per month and if possible daily so that you benefit from your payment and not the building society or bank.