A helping hand on the road to securing a contractor / freelancer mortgage
I recently read with great interest an article on The Telegraph website. The piece focused on the growing number of major lenders making it easier for contractors and self-employed individuals to secure mortgages. The topic, of course, is an important one for many contractor workers and something which we are committed to supporting them with.
There are more contractors and self-employed people in the UK now than ever before. However, while David Cameron has acknowledged them as ‘national heroes’, it has historically been difficult for this significant segment of the workforce to secure the types of finance, including mortgages, which others take for granted.
Particularly since the introduction of the stringent Mortgage Market Review lending criteria in April this year, qualifying for a long-term loan has become a close to impossible for many. Lenders have typically demanded three years’ worth of earnings history and contractors have had to demonstrate their existing contract has at least six months remaining, in addition to proving they have a two-year track record.
A turning tide?
This hard-line approach to assessing the finances of a self-employed or contractor worker is beginning to change. A number of mortgage providers have recently started considering self-employed borrowers with just one year’s worth of accounts. A few lenders are also becoming more willing to look at the previous employment history of contractor workers in the same field, rather than a two-year track record as a contractor.
Of course, specialist contractor financial service firms have long been dedicated to providing employment solutions to contractor workers which deliver the consistent work history lenders are looking for. And, for many, these models remain the most efficient method to take away the uncertainty and provide the employment stability lenders require.
That said, it’s still good news that major lenders are increasingly recognising the value and circumstances of the self-employed and contractor workforce.
It really is a case by case basis, but there are a number of options out there for contractor workers thinking about applying for a long-term loan. Get in touch with us for a free best advice consultation and we can help put you on the road to mortgage application success.