Contractor Mortgage ?

thequant

I keep coming across adverts online for "Contractor" mortgages, I thought it was next to impossible for the self-employed people these days to source mortgages without a long history of accounts.

Or is there a difference between being a "Contractor" and "Self employed" that I am missing ?

lea_t88

thequant wrote: »

I keep coming across adverts online for "Contractor" mortgages, I thought it was next to impossible for the self-employed people these days to source mortgages without a long history of accounts.

Or is there a difference between being a "Contractor" and "Self employed" that I am missing ?

I think a contractor can be a PAYE employee. I am a PAYE freelancer and have been told that (hopefully) when my mortgage goes through I will be classed as a short term fixed contractor.

ACG

Contractor may be self employed but they effectively have a contract for a job to last x amount of time.

How many years accounts do you have? It is possible to get a mortgage with just 1 years accounts or 1 years and a projection. You dont always need 3 years. But you may need around a 20% deposit.

thequant

ACG wrote: »

Contractor may be self employed but they effectively have a contract for a job to last x amount of time.

How many years accounts do you have? It is possible to get a mortgage with just 1 years accounts or 1 years and a projection. You dont always need 3 years. But you may need around a 20% deposit.

My situation is I have 2 contracts in place.

Contract 1: No fixed end date, but to build a product (software) for a client. Fee £45,000 to be paid by milestones. est time to complete 3-6 months.

Contract 2: ongoing contract at a fixed rate of £500 per day.

I've been in business for just over a month, financially I would be looking at putting down approx. 50-60% deposit.

Any chance for me ? If not, what do I need to do or wait for to be in a better position.

ACG

With just a month its going to be difficult. Nobody on the high street will accept this but because of the deposit im 99% sure there will be options if not straight away then maybe in the next couple of months.

Im presuming you have signed contracts in place which could be used as evidence?

If so i would get in touch with a broker and get them doing a bit of leg work to find you a lender, i would be pretty confident something could be done with a bit of looking.

thequant

ACG wrote: »

With just a month its going to be difficult. Nobody on the high street will accept this but because of the deposit im 99% sure there will be options if not straight away then maybe in the next couple of months.

Im presuming you have signed contracts in place which could be used as evidence?

If so i would get in touch with a broker and get them doing a bit of leg work to find you a lender, i would be pretty confident something could be done with a bit of looking.

Thanks, yeah I'd thought one month would be asking a bit, as I expect people would expect to see that my contracts are performing.

At the moment I am sole trader, but due to the projected income I'm planning to go LTD very soon.

How will this affect the situation, am I stronger being sole trader or LTD.

Also will going LTD reset the clock when a potential lender comes to look at my history ?

ACG

It all depends on the lender, but i would probably just stick to being self employed for the time being if your after a mortgage sooner rather than later.

I would still speak to a broker now, they may find a lender who is happy to take a bit of a risk with the deposit you have. They may say 3, 6 or 12 months but i wouldnt give up just yet until you had looked into it properly. We do all sorts of quirky mortgage applications and very few have deposits as big as yours so its worth a try i would say.