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  • FIRST POST
    • droiderm
    • By droiderm 12th Jan 19, 6:31 PM
    • 718Posts
    • 281Thanks
    droiderm
    IT contractor mortgage
    • #1
    • 12th Jan 19, 6:31 PM
    IT contractor mortgage 12th Jan 19 at 6:31 PM
    Hi everybody,

    I am looking to get a mortgage this year, in around the summer.
    Being an IT contractor it adds some complication, along with some other history I have . I declared bankrupt in 2007 (fully discharged and not on my credit file). As part of that was a voluntary repossession. There was equity and felt it was a good move at the time (may be not in hindsight).

    I did secure a mortgage in 2013 with nationwide with the above issues fully declared.

    However, additional complications are I am now "self employed" and it will be a relocation a few hundred miles away.

    I have done research and have found some contractor friendlier lenders . Specifically leeds building society and halifax which I believe fit my situation.

    I have been an IT contractor since September 2017.

    The general concerns I have is my history above (no adverse credit since) and I am a contractor and relocating. I appreciate it's likely I will need to use a broker but any suggestions or advice would be appreciated.

    Edit

    We will have around 30 to 40 k for a deposit and possibly looking for 250k (at the upper end)
Page 1
    • csgohan4
    • By csgohan4 12th Jan 19, 6:40 PM
    • 5,591 Posts
    • 3,635 Thanks
    csgohan4
    • #2
    • 12th Jan 19, 6:40 PM
    • #2
    • 12th Jan 19, 6:40 PM
    you really need a broker due to your prev bankruptcy to ensure you get the right lender for you
    "It is prudent when shopping for something important, not to limit yourself to Pound land/Estate Agents"
    • 5557223
    • By 5557223 12th Jan 19, 7:19 PM
    • 42 Posts
    • 9 Thanks
    5557223
    • #3
    • 12th Jan 19, 7:19 PM
    • #3
    • 12th Jan 19, 7:19 PM
    Get a good IT contractor friendly broker (ideally fee free). There are a few but most won't deal with you unless you are earning at least £325 a day.
    • DavidT67
    • By DavidT67 12th Jan 19, 9:23 PM
    • 89 Posts
    • 41 Thanks
    DavidT67
    • #4
    • 12th Jan 19, 9:23 PM
    • #4
    • 12th Jan 19, 9:23 PM
    Halifax will want to see your last three SA302 Self Assessment tax statements and take your average annual income from those. Others may want three years accounts for your limited company or simply base affordability on your daily rate, (Length of contract and gaps are factored in. )
    • kingstreet
    • By kingstreet 13th Jan 19, 9:34 AM
    • 34,895 Posts
    • 18,991 Thanks
    kingstreet
    • #5
    • 13th Jan 19, 9:34 AM
    • #5
    • 13th Jan 19, 9:34 AM
    Halifax will want to see your last three SA302 Self Assessment tax statements and take your average annual income from those
    Originally posted by DavidT67
    Not the case.

    Halifax will work from gross contract value, as will others.
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
    • Gary123456790
    • By Gary123456790 14th Jan 19, 4:44 PM
    • 601 Posts
    • 387 Thanks
    Gary123456790
    • #6
    • 14th Jan 19, 4:44 PM
    • #6
    • 14th Jan 19, 4:44 PM
    I can recommend this broker https://www.cmmemortgages.com/

    My wife is an IT contractor with Ltd company, and we used the above successfully.
    • Silian
    • By Silian 14th Jan 19, 4:58 PM
    • 165 Posts
    • 311 Thanks
    Silian
    • #7
    • 14th Jan 19, 4:58 PM
    • #7
    • 14th Jan 19, 4:58 PM
    We recently got a mortgage from Halifax as IT contractors. I had less than 1 year accounts (and my partner less than 2) but as we both worked in IT beforehand they were happy with it. They also used our day rates (instead of the small salaries we pay ourselves) for our affordability.

    They only required:
    3 months business bank statements
    Signed contract
    3 months personal bank statements

    I can't comment on how the previous bancruptcy will impact things - best to go via a broker. You don't even necessarily need a contractor friendly broker (we used a normal one) - IT contractors are looked at favourably with some banks.
    • Guerillatoker
    • By Guerillatoker 15th Jan 19, 12:46 PM
    • 406 Posts
    • 426 Thanks
    Guerillatoker
    • #8
    • 15th Jan 19, 12:46 PM
    • #8
    • 15th Jan 19, 12:46 PM
    I am currently in a similar situation dealing with CMME who are often advertised by ContractorUK, though their fees seem to be expensive (£995 on a first charge mortgage, I believe rates for second charge are bespoke). So far I have only heard/read good things and is the first Advisor to swiftly understand my tax situation (IR35).

    CMME are only interested in contract value, whereas most conventional lenders will complicate things by using accounts etc. In my situation (only 1 year accounts) that is much more preferable, but I don't know if that would be the same for someone who had 3+ years.

    However I will note that I have also been speaking to a local independent broker with much lower fees who has also been very helpful, just sound less hopeful than CMME. Unfortunately he has been away on a long weekend so I'm still awaiting his response having spoken to lenders.
    Last edited by Guerillatoker; 15-01-2019 at 12:49 PM.
    • sal_III
    • By sal_III 15th Jan 19, 12:54 PM
    • 782 Posts
    • 784 Thanks
    sal_III
    • #9
    • 15th Jan 19, 12:54 PM
    • #9
    • 15th Jan 19, 12:54 PM
    I'm and IT contractor and got a mortgage from Nationwide through a broker (£500 fee) based on daily rate alone. No company accounts, just a copy of the current contract and 6m company bank statements. No averse history though. The whole process was online (phone and e-mail) so I was happy to pay the fee instead of losing a day pay, to attend a face to face appointment etc.
    • droiderm
    • By droiderm 21st Jan 19, 8:08 PM
    • 718 Posts
    • 281 Thanks
    droiderm
    I can recommend this broker https://www.cmmemortgages.com/

    My wife is an IT contractor with Ltd company, and we used the above successfully.
    Originally posted by Gary123456790
    Thanks, the 995 fee puts me off but I may not have a choice
    • droiderm
    • By droiderm 21st Jan 19, 8:15 PM
    • 718 Posts
    • 281 Thanks
    droiderm
    I'm and IT contractor and got a mortgage from Nationwide through a broker (£500 fee) based on daily rate alone. No company accounts, just a copy of the current contract and 6m company bank statements. No averse history though. The whole process was online (phone and e-mail) so I was happy to pay the fee instead of losing a day pay, to attend a face to face appointment etc.
    Originally posted by sal_III

    I have read the nationwide lending criteria a number of times over the months and flip back and forth whether to see if I fit.
    If they class me as self employed I have no chance ( I don't have enough years accounts). If they class me as a "fixed term contractor " it's a chance.
    See the relevant bits at the bottom of this post.

    I jumped the gun a bit last night and applied for a DIP (it's probably 6 months until I want to do it properly, I know it was silly). I did it on the basis of being a fixed term contractor, annualising the day rate and taking 80 percent. It was referred requesting documentations but then accepted today without me sending any.

    I need to call them to check if I have made a mistake, which I now think I have

    Self employed applicants

    A self employed applicant may be:

    A sole traderA partner in a businessA director that owns more than 20% of the company*Sub-contractorsFixed term contractors!where they invoice through their own limited company or as a sole trader/partnershipFoster carers.

    Sub-contractors who invoice their employer

    Sub-Contractors who work via their own Limited Company, Partnership or as a sole trader are treated as self-employed.

    Where a Sub-Contractor is working as an individual only basic rate tax (currently 20% or 30%) is deducted by the employer; this is commonly seen as a CIS deduction on the payslip. In these cases the applicant should be treated as self-employed and cannot be treated as a Fixed Term Contractor.

    If a Sub Contractor’s employer deducts full PAYE tax and National Insurance, please refer to!employed fixed term contracts.
    • droiderm
    • By droiderm 26th Jan 19, 8:32 AM
    • 718 Posts
    • 281 Thanks
    droiderm
    For anyone else interested, I called nationwide and it seems they would treat me using their self employed criteria (which is clearly not what I want). This is contrary to what I have read elsewhere.
    • Guerillatoker
    • By Guerillatoker 26th Jan 19, 10:30 AM
    • 406 Posts
    • 426 Thanks
    Guerillatoker
    For anyone else interested, I called nationwide and it seems they would treat me using their self employed criteria (which is clearly not what I want). This is contrary to what I have read elsewhere.
    Originally posted by droiderm
    My broker has got me an Agreement in Principle from Pepper Money who appear to be pretty good at understanding unique working situations, though there are reports on here of them taking a while to process the application but this is due to their specialist nature. Worth checking them out, their website is pretty transparent about their fees and mortgage options.

    Can't vouch for the actual success of getting the mortgage - maybe if this thread is still alive in a few weeks!

    I also never ended up using either broker I mentioned previously, I used one with Mortgage Advice Bereau (which I think is an umbrella of lots of independent brokers who agree to a certain standard operating procedure). Their fees are less but still not as low as I suspect an independent broker would be.
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