Contractor

Cameron1590_2

Hello all,

I am looking to start contracting shortly for a rate of £350 per day. This rate is easily achievable with most contracts paying up to £450 per day.

Just wondered what chances I have of getting a mortgage and who the best lender would be?

Looking to borrow around £220k with a £50k deposit, no others debts. Partner is employed full time on 18k pa.

Thanks

csgohan4

you need a track history and that means at least 1-2 years of self assessment or limited company accounts


If your just starting it will be difficult.


Engage a broker to try and match you to a lender

amnblog

If you are Contracting in a role following previous employment experience you are in with a chance.

You need a Broker.

sal_III

As mentioned by csgohan4 as a contractor you will need 1-2 years of ltd. accounts and contracts, which you won't have so it becomes tricky.

If you are just moving to contracting and was a permanent employee before you will need a specialist broker. Even though more and more lenders are starting to understand how the contractor net income is formed, it's still hard to work directly with them. Transition case like yours - forget it. Your best bet is to speak to a specialist broker who has already deep relationship with lenders and is capable of explaining to them the actual value of your income.

My advise as a seasoned contractor is to think long and hard, whether this is a good moment to make a serious financial commitment as taking a £220k mortgage. I hope you already know that unlike employment contracting is not a guaranteed income and you can be "sacked" without notice, often your second contract is harder to secure than the first and you might find yourself benched (without work) for months. So make sure you have at least 3 months (preferably 6+ months) worth of expenditure in savings at all times.

My sincere advise is to wait 1 year, build up reserves and 1 year of company accounts. Then if you still feel comfortable being a contractor go for a mortgage. Rule of thumb is you can borrow 1000x daily rate, so in the case of £350pd you can borrow ~£350k