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.
- 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.
- Any profession
- No minimum income
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 my website, 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 01494 526 400 to discuss your contractor mortgage.
FAQs
Can I still get a contractor mortgage if I’ve had a mortgage application refused in the past?
Yes, it’s still possible to secure a Contractor mortgage even if you’ve had a previous mortgage application declined. As a specialist contractor mortgage broker, I work with lenders who understand the unique circumstances of Contractors, including those with adverse credit histories. By assessing your situation and matching you with the right lender, I can help increase your chances of a successful application.
What steps can I take to improve my chances of success when applying for a Contractor mortgage with bad credit?
Managing your finances effectively is key to improving your chances of success when applying for a contractor mortgage with bad credit. This includes ensuring your business bank statements and contract invoices align, maintaining a positive credit rating, and having a deposit saved up. Additionally, working with a specialist broker who understands the contractor mortgage market can provide valuable guidance and support.
Are there specific criteria I need to meet to qualify for a Contractor mortgage with bad credit?
While each lender may have different criteria, some common factors considered include your income calculated based on your current weekly contract, the length of your contracting history (typically 12 months or less), and the nature of any defaults or CCJs registered against you. Working with a specialist broker can help you navigate these criteria and find lenders who are willing to work with your specific circumstances.
How can a specialist broker assist me in securing a contractor mortgage with bad credit?
A specialist broker who understands the contractor mortgage market can be invaluable in securing a mortgage with bad credit. They have access to a wide range of lenders, including those who specialise in lending to contractors with adverse credit histories. Additionally, they can provide expert advice, guide you through the application process, and negotiate on your behalf to secure the most favourable terms possible.
What documentation will I need to provide when applying for a contractor mortgage with bad credit?
When applying for a contractor mortgage with bad credit, you’ll typically need to provide documentation such as your business bank statements, contract invoices, proof of income, and details of any adverse credit issues such as defaults or CCJs. Working with a specialist broker can help ensure you have all the necessary documentation in order and present your application in the best possible light to lenders.
Your home may be repossessed if you do not keep up repayments on your mortgage. You may have to pay an early repayment charge to your existing lender if you remortgage.
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A quick overview of the topics covered in this article.
- Can you get a Contractor Mortgage with Bad Credit?
- Which lenders can Contractors apply for with bad credit?
- Lending criteria for Contractors with bad credit
- Contractor mortgages based on day-rate earnings
- Can you get a Contractor mortgage with a default?
- Can you get a Contractor mortgage with a CCJ?
- Can I get a Contractor Mortgage with an IVA?
- Refused a mortgage as a Contractor?
- Mortgage lenders for Contractors.
- Contractor mortgages – how to improve your chance of success
- How a specialist broker can help with your Contractor Mortgage
- FAQs
Latest articles
October 11, 2024
October 11, 2024
October 11, 2024
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.
- 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.
- Any profession
- No minimum income
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 my website, 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 01494 526 400 to discuss your contractor mortgage.
FAQs
Can I still get a contractor mortgage if I’ve had a mortgage application refused in the past?
Yes, it’s still possible to secure a Contractor mortgage even if you’ve had a previous mortgage application declined. As a specialist contractor mortgage broker, I work with lenders who understand the unique circumstances of Contractors, including those with adverse credit histories. By assessing your situation and matching you with the right lender, I can help increase your chances of a successful application.
What steps can I take to improve my chances of success when applying for a Contractor mortgage with bad credit?
Managing your finances effectively is key to improving your chances of success when applying for a contractor mortgage with bad credit. This includes ensuring your business bank statements and contract invoices align, maintaining a positive credit rating, and having a deposit saved up. Additionally, working with a specialist broker who understands the contractor mortgage market can provide valuable guidance and support.
Are there specific criteria I need to meet to qualify for a Contractor mortgage with bad credit?
While each lender may have different criteria, some common factors considered include your income calculated based on your current weekly contract, the length of your contracting history (typically 12 months or less), and the nature of any defaults or CCJs registered against you. Working with a specialist broker can help you navigate these criteria and find lenders who are willing to work with your specific circumstances.
How can a specialist broker assist me in securing a contractor mortgage with bad credit?
A specialist broker who understands the contractor mortgage market can be invaluable in securing a mortgage with bad credit. They have access to a wide range of lenders, including those who specialise in lending to contractors with adverse credit histories. Additionally, they can provide expert advice, guide you through the application process, and negotiate on your behalf to secure the most favourable terms possible.
What documentation will I need to provide when applying for a contractor mortgage with bad credit?
When applying for a contractor mortgage with bad credit, you’ll typically need to provide documentation such as your business bank statements, contract invoices, proof of income, and details of any adverse credit issues such as defaults or CCJs. Working with a specialist broker can help ensure you have all the necessary documentation in order and present your application in the best possible light to lenders.
Your home may be repossessed if you do not keep up repayments on your mortgage. You may have to pay an early repayment charge to your existing lender if you remortgage.
Very fast efficient service – would recommend.
Hopson & Johnson – 3rd June 2024
Steve & Sue were professional throughout the whole proceed. Would have no hesitation in recommending their company.Hentschel – 29th May 2024
We experienced difficulty in finding our original mortgage and Steve and Sue were instrumental in helping us purchase our first home. Likewise, when it came to remortgaging 2 years later they were pivotal in finding us a suitable mortgage rate with a new provider.Henschel – 27th March 2024
Thank you to both Steve and Sue for all the hard work and patienceAnon – 22nd March 2024
Fantastic service as always.
Anon – 4th March 2024
Steven and Sue have been absolutely wonderful throughout the whole mortgage application process. Even when we were unsuccessful with our first application which left us panicking, Steven remained calm and professional, informed us there were plenty of other options and worked quickly on a new application suited to our needs. Steven would answer his phone efficiently and if he missed us, he would call back immediately, something which can be quite rare these days. We would recommend Steven and Sue to anyone that maybe struggling with the whole mortgage process, especially the self employed, they took all the stress from us and deserved every single penny we payed them. We will absolutely be returning to Steven and Sue in the future and only wish we had found them sooner. We found them to be invaluable and an absolute pleasure to deal with, they are the reason we can finally sleep well at night! Thank you both again.Oldham – 22nd February 2024
Helpful and helped us in finding mortgage with suitable interest rates given our adverse credit at the timeKunda – 15th February 2024
I have used Steve twice now and both times he has been professional and has always listened to me, which was very reassuring when I was considering not buying anymore and giving up on the process.Anonymous – 6th February 2024
Steve and Sue have been fantastic, they worked hard to get our application pushed through before Christmas and were on hand and very responsive to any questions that we had regarding our mortgage application. I would highly recommend.Martin – 2nd January 2024
I have felt very well looked after throughout this process, and advocated for, to meet my individual financial needs. The communication between Steven, Sue and I has been of the highest standard, and I could not have asked for more. I was treated without prejudice, and with understanding, and I am so happy that I have been able to buy a home which my daughter and I can now settle into, and start a new chapter. Thank you so much Steven and Sue!Hentschell – 21 November 2023
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