Mortgage for IT contractor

holly_hobby

Halifax we're always pretty good with IT contractors - if you're operating under a Ltd Co (which is generally the requirement of the client), they based lending on the value of the annual contract, and don't require the typical 2/3 yrs books as with general s/emp peeps.

However, being completely new to contracting, with only 1 mth under your belt of a 6 mth contract, you'll really struggle - and will need at least a yr of renewed placement for this to be seriuosly considered, unless the ltv is 50% or below.

There are (if you google) several firms whom concentrate on contractor mortgages, as we're a bit of a hybrid between employed and self employed (if you work for 1 client at a time that is !).

Personally, I would give it at least 12 mths to see if you like contracting, and although the money (even after tax/nic/expenses) is generally v good, its not for everyone, with many returning to employed positions circa this period (naffed off with travelling all over the UK, and constantly being away from home is the main issue for most).

As what you don't want is to have a mge that whilst sustainable on your contacting salary, this is rarely replicated in an employed role .. meaning that even if you hate contracting you'll be stuck in it until you can re-arrange your mge/outgoings etc to be affordable on an employed wage.

Wish you well ..

Hope this helps

Holly xx

sartois

holly_hobby wrote: »

Halifax we're always pretty good with IT contractors - if you're operating under a Ltd Co (which is generally the requirement of the client), they based lending on the value of the annual contract, and don't require the typical 2/3 yrs books as with general s/emp peeps.

However, being completely new to contracting, with only 1 mth under your belt of a 6 mth contract, you'll really struggle - and will need at least a yr of renewed placement for this to be seriuosly considered, unless the ltv is 50% or below.

There are (if you google) several firms whom concentrate on contractor mortgages, as we're a bit of a hybrid between employed and self employed (if you work for 1 client at a time that is !).

Personally, I would give it at least 12 mths to see if you like contracting, and although the money (even after tax/nic/expenses) is generally v good, its not for everyone, with many returning to employed positions circa this period (naffed off with travelling all over the UK, and constantly being away from home is the main issue for most).

As what you don't want is to have a mge that whilst sustainable on your contacting salary, this is rarely replicated in an employed role .. meaning that even if you hate contracting you'll be stuck in it until you can re-arrange your mge/outgoings etc to be affordable on an employed wage.

Wish you well ..

Hope this helps

Holly xx

I am an IT contractor (have been for about 5 months now) and have just received an Agreement in Principle from Halifax. If you approach them directly you will definitely need 2 years of accounts, but as Holly said there are Contractor specialist mortgage brokers out there who will be able to get you a mortgage based on your current contract and your daily rate... even if you have only been contracting a month.

Waiting a year could be expensive depending on where you live (or want to live). I personally am in London so with predicted house price rises of 10-20% over the next year it's a case of sooner rather than later for me as a first time buyer

ComputeAngel

ACG wrote: »

Unfortunately im not allowed to on the forums (part of the forum rules).

Have you tried google, asking friends/family or work colleagues who may be in a similar situation?

I understand, Is it also not allowed to send PMs?

ACG

Theres nothing to stop you sending PMs, just the brokers on here can not recommend or solicit for business.

kingstreet

In my experience, "contractor specialist" brokers charge about three times what everyone else charges and do the case with the Halifax, which any other broker can do, with about ten minutes chat with their BDM.

If it can be done, any decent whole market broker can do it, based on contract daily rate, as long as there's a strong enough history and/or enough contract left to run.

mrchiggles

One more thing worth considering is talking to your own bank. I'm still a perm but asked them how it might work in the future if I became a contractor and they said that they'd be able to look at past earnings/etc and might be able to bend the rules a bit more than for new business.

Might have been the bank's mortgage adviser spouting rubbish but nothing to be lost by dropping them a line...

Wh05apk

mrchiggles wrote: »

One more thing worth considering is talking to your own bank. I'm still a perm but asked them how it might work in the future if I became a contractor and they said that they'd be able to look at past earnings/etc and might be able to bend the rules a bit more than for new business.

Might have been the bank's mortgage adviser spouting rubbish but nothing to be lost by dropping them a line...[/QUOTE]



I suspect it was, as generally a lenders criteria is fixed, and not is rarely flexible for existing customers.

sartois

kingstreet wrote: »

In my experience, "contractor specialist" brokers charge about three times what everyone else charges and do the case with the Halifax, which any other broker can do, with about ten minutes chat with their BDM.

My experience is different to this. The "Contractor Specialist" broker I used does not charge a fee and the mortgage offer (in principle) is the same as the lender are offering on the high street. Are you referring to the fee that they charge? I looked at a few and the most they seem to charge is £500. Is that 3 times more than normal?

kingstreet wrote: »

If it can be done, any decent whole market broker can do it, based on contract daily rate, as long as there's a strong enough history and/or enough contract left to run.

Going through a contractor specialist made life a lot easier and even though I am new(ish) to contracting was able to get an agreement in principle in about half a day. Without going through a specialist would require 2 years worth of accounts from my understanding.

Wh05apk

sartois wrote: »

. Without going through a specialist would require 2 years worth of accounts from my understanding.

Not on the ones I have done.

GMS

sartois wrote: »

Without going through a specialist would require 2 years worth of accounts from my understanding.

Lender criteria is the same however the business is introduced to them.

'Specialist' is often used to increase charges.

As has been said, any decent broker would know what to do with a contractor case.