Contractor Mortgage

hf

Hello

I have been contracting under an umbrella company for 21 months and have a current contract until June 2014. I have had an acceptance in principle from 2 lenders but now one of them has requested 2 years wage slips and a letter from my employer confirming my next contract renewal. I cannot provide 24 months of wage slips and highly doubt my employer would put a contract renewal in writing before my contact is due for renewal.

The position I am now in is very stressful as I was orignially told I could begin making offers, so I have had an offer accepted and the vendor wants to move as quickly as possible but I do not have a guaranteed mortgage in place. The other lender is Barclays who have said I only need 6 months contracting history.

Does anyone have any experience with Barclays and contractor mortgages? And is it likely that they are going to request the same 2 years paperwork?

Any advice regarding contractor mortgages would be greatly appreciated.

Thanks in advance.

ACG

From the woolwich website:

Contract workers
Our policy on applicants who are contractors depends on if they are working on an employed or self-employed basis.
In all cases, however, we will require the applicant to have an established 3-year track record of employment within the same line of work and to have been contracting for a minimum of 1 year either on an employed or self employed basis.

• If applicants choose to manage their own tax by setting up a limited company or contract on a self employed basis then they should be considered to be self-employed. Please see our self-employed section for further details
• If they are paid via an umbrella company who pays tax and NI for the applicant (effectively they become a PAYE employee) then we would need to see their income evidenced by P60, payslips and bank statements

Does that help?

hf

Thanks ACG


When I went to get AIP at Barclays I explained my employment situation and was totally honest. She took copies of all paperwork including P60's and as long as I had six months history contracting it will be fine. Then she gave me the AIP and told me to find a house.
I have not progressed this as yet but reading your post from the Woolwich website it looks like I may have a problem.

kingstreet

formston wrote: »

I have had an acceptance in principle from 2 lenders but now one of them has requested 2 years wage slips and a letter from my employer confirming my next contract renewal..

How did you choose these lenders?

Do you have professional advisors representing you?

hf

Went to Barclays as they were doing 95 % but changed my mind after speaking with advisor and decided to put 10% deposit. Who then checked and proceeded with AIP.


The other advisor was through an estate agent and I was again upfront with all details. She said AIP gone through but after we put offer in and completed paperwork she said she need extra paperwork which I told her from the off that I could not t.

Thanks in advance

ACG

Contractor mortgages are not my strong point having never done one as a broker.

It appears they want 1 years evidence which i assume you can probably provide?
And 3 years in the same industry even if with different employers.

If i were the broker on this case i would get your details and run it by my account managers at the various lenders to see whether they would accept it as i dont know the answer.

I think the fact you have 4 months left to run could be a problem as i believe the industry minimum is around 6 months.

kingstreet

Chances are, if you asked if your borrowing power could be based on your ""day rate" both your previous sources of information would give you a blank look and start asking about accounts and SA302s.

Fortunately, there are many brokers (who are nowhere near a lender or estate agent) who would know what you meant and could advise you accordingly.

If you google "contractor mortgage" you'll get the right advice, but end up paying a fee of £750+, although many brokers could do what you need without charging anything like that...