Working as an IT contractor gives you the flexibility to work when you want and how you want. But the flipside of this freedom is that the way in which you get paid can have an impact on what mortgage lenders are prepared to offer you a home loan.
However, despite possibly being declined by a high street lender in the past, there is some good news – there are specialist lenders prepared to work with IT contractors, offering favourable terms based on your income and way of working.
Our advisers are specialists in helping self-employed people get mortgages, even if they have bad credit issues, irregular income structures, and short periods of earnings history.
The types of IT contractor that our advisers can help include, but are not limited to:
- Freelance web designers and developers
- Programmers and coders
- Software developers
- IT project managers
- Technical support staff
- And more…
If you would like to discuss your options and find out how you can get a mortgage as an IT contractor, please contact our friendly team today for a quick chat.
How do IT contractor mortgages work?
Just like any other mortgage, when you apply to a lender, they will look at your financial situation and run calculations to see if they believe you can afford repayments and are a low risk for a home loan.
However, proving your earning history as an IT contractor will often be where the problems occur, as many lenders want to see long-term earnings, accounts, and proven sustained income.
But not all lenders work in the same way, and not all lenders have the same strict criteria. In fact, there are specialist lenders in the UK who work with limited company directors, freelancers, and contractors and understand how their pay can be structured.
Our advisers are specialists in IT contractor mortgages and are available now with just one quick phone call or email into our friendly team.
What are the best mortgages for IT contractors?
As you might have guessed, some mortgage lenders won’t even work with contractors. You might have already experienced this, and if you have made more than one application, it means your credit file could have some failed searches now set against it.
But don’t panic.
Our advisers know how to package an application and based on the information you provide will be able to send that into the best lender most likely to accept it.
This unique approach means that there is no one lender that we would recommend as offering the best mortgage for IT contractors.
Each person our advisers help will be treated individually, leading to an application into the lender currently offering the best mortgage at that point in time.
Mortgages for contractors with bad credit
Each and every week our advisers talk to people who have bad credit. That might include missing payments on a credit card and loan, having defaults on their file, or even having problems in repaying their student loans.
It’s not an uncommon situation, and lenders understand that more and more people in the UK have had credit issues since the recession.
Because of that, mortgage lenders are now more flexible when it comes to offering home loans to people with bad credit.
But typically, it’s the specialist lenders where you will find the mortgage products for IT contractors who might have poor credit.
Don’t be put off. Place a call today into our friendly team to see how they can help you get the mortgage that suits you and your unique situation.
Tips on how to get the best mortgage deal
IT contractors (or any contractor for that matter, even with 1 years’ worth of accounts) can help improve their changes of getting a good mortgage deal by not just working with a specialist adviser, but also by acknowledging the following tips:
1. You might not get a deal with a high street lender
Don’t think that it’s only the high street lenders you should apply to. Contractors and the way in which they are paid puts them in a very unique position financially.
When the big-name lenders review applications they might only take your salary and dividends into account to assess your affordability.
That means it can be hard to get a mortgage with the high street names, with specialist lenders offering more favourable mortgage products to suit you.
Our advisers will help you to put together an application that could use an annualised rate of pay instead. That application will then be placed with a lender more likely to offer mortgages to an IT contractor.
2. Get your financial paperwork together
When you talk with our advisers about getting a mortgage as an IT contractor they will ask for as much supporting information as possible.
It will help you if you can prepare some of this in advance including:
- 3 years’ worth of accounts if available
- 3 months’ worth of payslips
- 2 forms of photo ID
- Bank statements
- Information on your monthly outgoing and incoming expenses
- Details on any other financial commitments
3. Keep your credit rating healthy and in-check
It is possible to get mortgages for contractors with bad credit, and in fact, we have a whole section on our website dedicated to this particular situation.
However, if you can ensure your credit rating is in good shape with no outstanding defaults on file, it will mean you should be able to get better rates and deals.
But don’t worry if you do have bad credit.
There are still mortgages available, with our advisers having access to wide range of bad credit mortgage lenders prepared to work with IT contractors.
It can help to pay off any existing loans, credit cards, or financial obligations, but won’t be a barrier in many cases to getting an IT contractor mortgage.
If you are unsure of your current credit rating, you can use services such as Experian and Equifax to run a quick report against your name.
One aspect that people often neglect to do is remove links to any ex-partners who could negatively impact their credit rating. Check your credit report to make sure you don’t have any nasty surprises due to your past history, and those you previously shared financial commitments with.
4. Try to get a decent deposit together
You will get a better mortgage deal the higher the deposit you have. But what makes for a decent deposit?
In most cases you will need at least 5% in order to get a home loan. To put that into perspective, let’s say the property you want to buy is £150,000 then you would ideally have at least £7,500 in order to borrow £142,500.
But again, there are lenders and schemes that will offer mortgages with no deposit, so to find out how get in touch with us today.
5. Try to have prolonged periods of contract work
As part of their risk and affordability calculations, lenders will want to see proof of regular and sustained income. That means try to avoid long periods of unpaid activity leading up to your application.
The general rule of thumb here is that lenders will look negatively on periods where a contractor has had 2 months off work, between contracts.
If you can show the mortgage lender that you have a track record of solid and regular employment for 2 years with no length breaks, they will be more inclined to lend to you.
6. But even first-time contractors can get a mortgage
Surely that means you will be declined if you have only started contracting, and don’t have long term historical employment?
Not so actually.
Our advisers have access to specialist mortgage lenders for IT contractors who could be prepared to overlook this aspect, offering you a deal based on your individual application.
What to do next?
Having the freedom and flexibility of IT contract work shouldn’t stop you from getting a mortgage. Whilst you might have been declined previously, it might have been due to your application not being structured correctly, or simply that you chose the wrong type of lender.
With years of experience in helping self-employed people get mortgages, our advisers are ready and available now to take your call.
After just a few minutes you could know what the possibilities are and could be on the way to getting the home loan you deserve. Call us today or complete an enquiry form.