Mortgage using rolling freelance contract

SmileyC

I'm self-employed (since October 2014). I had been a full-time mum prior to that, so my husband had been paying the mortgage alone for 10 years. My earnings in my first financial year were well below the tax threshold. I then secured a major freelance contract (started the contract 1 October 2015 and looks like being a rolling contract - renewed every six months). I am now earning a good amount each month (averaging £3k gross/month over the last 9 months) and have saved £21.5k. Our house has £42k left on the mortgage and we hope to sell for £110/£120k. I will be renewing my contract for a further 6 months in the next few weeks. My husband is employed and earns around £35k (giving us a joint income amounting to about £72k gross).

Obviously, my concern is that even though I am earning a good amount, I have only been doing so for 9 months (and haven't yet had to pay tax) and so can't provide the two or three years' of earnings figures that seem to be required. I read somewhere that if you can show that you have a contract for future months then lenders may be more happy to look at past months and base future earnings on that. Does anyone know much about this and which lenders are more likely to take me seriously in terms of a new mortgage? We are looking to raise about £210k for a new home (house price is £300k). Any help would be gladly received.

cahillg81

Is your contract on an employed or self employed basis?

MortgageMamma

There are lenders that are happy to give mortgages to contractors - what do you do for a living and did you do the same or a similar job prior to being a stay at home Mum?

SmileyC

Thanks to you both for responding. The contract is on a freelance (self-employed) basis. It's editorial work for a major UK organisation and I have been told verbally that the contract is highly likely to continue indefinitely on a rolling six-month basis. The work was previously done in-house but has been outsourced because the skill level was too low with the previous employees. The work will always need doing and I have been assured that they will need to continue to outsource the work in order to maintain the higher level of quality. (So the job seems pretty secure.)
I am coming towards the end of my second contract period and am due to renew for a further six months within the next few weeks (they are currently fine-tuning the contracts). The wage will be the same.
My previous job was not in the same field. I was an IT trainer - earning just over half of my current gross salary.

MortgageMamma

Ok, this is just MY knowledge of the area of contractor mortgages but other advisers may know different.


It is my belief that you will need at least a two year track record of the contract work, but I do know there are lenders who may consider your case with what you've got now, so long as your finances/credit score is in order.


The best approach you could take right now before committing yourself to buy this property is contact a couple of whole of market mortgage brokers to find which lender you are going to use and advise you of the requirements reqarding your proof of income. |once this is done you need to get a decision in principle to work out if the suggest lender will advance the loan to you.


Hope this helps


MM

cahillg81

It could work, as MM says speak to a broker directly and get some information.

SmileyC

Thanks to both of you. Fingers crossed!