In recent years more and more people, from IT consultants to teachers, have been employed on short term contracts. These could be anything from three months to three years in length, and may be renewable or not.
Unfortunately many high street lenders see contractors as being self-employed regardless of the terms of their contract. As a consequence a contractor or freelancer may find it more difficult to secure a mortgage. If you work on a contract you can get a mortgage, but things are more tricky compared to those with permanent jobs. Whether you're using an umbrella company to administer your contract and remuneration or operate through your own limited company, you'll find lenders treat you differently to those in full time employment.
High earning freelancers may be shunned by high street lenders because they are deemed too risky to take on. Big-name mortgage lenders can turn you down because you have not been contracting for a period of three years or more.
The good news is some lenders have woken up to the fact that contract workers are a perfectly safe lending risk. The key is approaching the lenders who are contractor friendly.
If you've been contracting for a number of years, you are likely to have a reasonable choice of products. If you've just started contracting, lenders will look at your case individually. Essentially, lenders want to ascertain how employable you are. An important factor is your skills and experience and the industry you're operating within. For instance, if you are a highly skilled software developer then it is likely your services will be in demand for the foreseeable future, meaning the lender is likely to have a good level of confidence in your ability to secure new contracts in the future and be able to repay your mortgage.
Some of the products suitable for contractors are often only available through an authorised intermediary such as a mortgage broker. Use the enquiry form on this website to contact an independent broker with expertise in assisting contractors and freelancers.They have access to the whole mortgage market in the UK and can locate the best mortgage for contractors.