Contractor Mortgages With Bad Credit

Can You Get A Contractor Mortgage With Bad Credit?

Getting a mortgage as a Contractor, even if you have a good credit rating, can sometimes be a bit tricky. Add a history of credit issues, big or small, and things can become more difficult.

Fortunately, I work with a range of lenders who can help contractors get a mortgage with bad credit, and I can help you find the best deal available.

Which Lenders Can Contractors Apply For With Bad Credit?

Quite a few as lenders are waking up to the self-employed market becoming a lot bigger. Most mortgage lenders for Contractors will only consider applications that come via a broker, and each has specific lending criteria.

For these reasons, it is always best to get advice from a specialist broker before applying directly.

Lending Criteria For Contractors With Bad Credit

• Listed below are criteria that some lenders will use when assessing you for a mortgage.
• Income calculated on current weekly contract – typically this would be 46 weeks but some will lend based on 48 weeks income.
• Any profession
• No minimum income
• Only 12 months of contracting history is required but this could be less if you are starting as a Contractor but have been in the same line of work for a few years.

For example, if you were employed as a Programme Manager for a few years but now started on your contracting as a Programme Manager, lenders take comfort that you are working in the same line of work. If you were on your second 6-month contract and had a reasonable deposit, you would stand a much better chance of getting a mortgage than someone who had only just started Programming having come from a background of Car Sales for example.

Contractor Mortgages Based On Day-Rate Earnings

I know what you are looking for in a Contractor mortgage, and that is a lender that will lend to you based on your day rate – not Accounts, SA302s, Tax Overviews, or Tax Computations – just your day rate. For example;

• £500 per day x 5 days of the week x 46 weeks in a year = £115,000 pa.

That is the figure a lender would assess you on for a mortgage, not your net profit if you were self-employed or drawings & dividends if you were a limited company.

Can You Get A Contractor Mortgage With A Default?

Yes, I can match you with lenders who will accept applications from Contractors with defaults. I will need to understand the details of the defaults, such as when they were registered, the reasons and amounts for them, and their current status.

I work with several lenders who will provide a contractor mortgage to people with defaults.

Can You Get A Contractor Mortgage With A CCJ?

Yes you can.

A CCJ is a more serious credit issue, however, some lenders will consider applications from Contractors with several CCJs registered, provided they can prove their income as a contractor.

Can I Get A Contractor Mortgage With An IVA?

Yes, it’s possible to get a Contractor mortgage having had an IVA, whether it is cleared or not.

I work with a few lenders who can offer Contractor mortgages to those who have had an IVA, who will consider when the IVA was registered and what the circumstances were around it.

Refused A Mortgage As A Contractor?

I can help you because I am a Contractor mortgage broker, helping clients who have CCJs or Defaults or any manner of adverse history on their credit file.

I specialise in helping those who’ve had an application declined.

If your Contractor Mortgage was refused, that doesn’t mean you won’t be successful next time.

Many lenders want to see a regular pay slip before they sign off on a mortgage. Contractors can fall through the gaps because even though you’re invoicing more than enough to pay your mortgage and meet their requirements, your fluctuating income is seen as a risk.

The standard criteria lenders apply just don’t work for contractors, and that means you can find your applications refused regardless of the amount of money in your bank account.

This way of thinking is becoming outdated with a workforce that’s becoming more and more reliant on the hard work of contractors – and it’s a way of thinking that I’ll challenge by securing your Contractor Mortgage.

Mortgage Lenders For Contractors.

I know which lenders accept Contractor Mortgage applications having built up a list of lenders and I’ll make sure your application isn’t rejected because they are looking for accounts or SA302’s.

The lenders I talk to will lend based on your weekly contract amount times the number of weeks you work in a year. Provided you have had a contract or two under your belt, I have lenders who will lend to you if you have a poor credit history.

In my nearly three decades as a Mortgage Broker, I’ve learned the root cause for mortgages being rejected and it’s very simple – lenders do not like to take risks.

As a contractor, you represent an increased risk to lenders because once a contract comes to an end, you may not get a new one.

As a contractor mortgage broker, I’ll do everything I can to minimise the risk you pose to lenders and negotiate a successful mortgage application on your behalf.

But there are steps you can take to ensure you’re successful when you apply.

Contractor Mortgages – How To Improve Your Chance Of Success

If you’re reading this, you’re a phone call away from increasing your chances of success.

I understand the way Contractors are paid and what paperwork lenders are looking for when applying for a mortgage.

I can help you to secure a mortgage based on your contract rate even if you’ve been declined in the past.

Manage Your Finances

This almost goes without saying, but your finances need to be in order. Contracting can be lucrative, but your financial records need to demonstrate this.

By this I mean your business bank statements cross reference with weekly contract invoices, your bank statements do not show bounced DDM’s or returned cheques.

If you have a positive credit rating and your finances are in order, you will be in a stronger position when it comes to finding a mortgage.

Have A Deposit

Unsurprisingly, large deposits help a successful application.

The higher your deposit, the lower the loan-to-value ratio will be, and the fewer hoops you’ll be forced to jump through. If you’re managing your finances well, you should be able to put money aside to increase your chances of a successful application.

How A Specialist Broker Can Help With Your Contractor Mortgage

Even if your application has been declined or refused in the past, give me a call as I know this market and may have lenders you may not have approached for a mortgage.

Owning your own home doesn’t mean finding a different career path to follow. Call me, Steven Neale, on 07949 713563 to discuss your contractor mortgage.

FAQs