Your Access To Mortgage Lenders
Contractor Mortgage Broker
Jones & Young are a professional contractor mortgage broker, arranging mortgages to self-employed customers for over twenty years.
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We have access to High Street Lenders that will use your contract as income proof. As contractor friendly lenders do not require any company accounts you only need to have been contracting for a minimum of 1 month. These specialist mortgages mean we can use your Gross Day Rate in the same manner as an employed person would use their payslips or contract.
To calculate your annual income from your contract, the lender will multiply your daily rate by the number of days contracted per week and allow 46 or 48 weeks of this weekly income (they do expect you to have time off, even if you don’t!). If you are paid a set hourly rate, this works in the same manner. This calculation gives you the gross income the lender will use for affordability. Many of these contractor friendly lenders are mainstream lenders, but not all lenders, banks or building societies will accept this type of income and each have very specific lending criteria for contractors.
As specialist mortgage brokers we know which ones are likely to accept you based on your personal circumstances. If you are contracting via an umbrella company, we would use your contract along payslips, regardless of any deductions on them.
Most lenders average the last 2 years’ accounts, although there are some that use the latest year’s figures for affordability purposes and will generally use either your salary and dividends or your salary and share of net profits. Depending on how the company is run, we can ascertain the method that is most beneficial for you.
However, as a contractor you can use either your company accounts or your contract to prove your income. If you use your contract to prove your income, this would be seen as employed income and the lenders would ignore your company accounts or personal tax returns to calculate how much you can borrow. This enables you to borrow against your gross income and run your limited company in a far more tax efficient manner, saving you from needing to draw extra dividends, and pay more tax, in order to secure the borrowing amount you require.
If you are new to contracting you only need to have been contracting/trading for at least a month. Your contract along with previous industry experience will likely satisfy a mortgage lender rather than having to evidence at least a year of trading like all other self employed people. This is because some genuine contractor mortgage lenders will see you as an employed person and use your contract alongside your bank statements to calculate your annual income instead of your company accounts and SA302s.
The most common income evidence a mortgage lender requires from a company director is the last two years’ salary and dividends, generally an average is taken over the last 2 years, but there are some lenders who will use latest years figures. The main issue with this for contractors is the taxable income is normally much lower than your actual income derived from your day rate. Since the coronavirus pandemic many mortgage lenders still penalise self employed persons, reducing the amount they are able to borrow due to the uncertainty of business continuity, but this is not the case with contractors. There is also a common misconception that contractor mortgage deals are at a higher interest rate than other mortgages and that it is only a specialist mortgage lender that would consider using your day rate.
As specialist contractor mortgage brokers we understand lending criteria and know the best mortgage lenders for you, the majority of which are on the high street. This means we can obtain you a competitive mortgage deal at the same interest rate that would be available to an employed person.
If you are in the construction industry and get paid via the CIS scheme, we can use your CIS statements as pay slips; this means you can use your gross pay, be tax-efficient and still get the mortgage you deserve.
If you are a day rate contractor, lenders can use your daily rate rather than your taxable income. Not only does this help to give you higher lending figure with a contractor mortgage than if you relied on your company accounts, but it can give you peace of mind knowing that your needs are being accommodated, and your company can remain as tax efficient as possible.
The rates you are offered do not change, you aren’t penalised in any way for using your day rate or CIS statements, and there are many high street banks offering mortgages for contractors.
Welcome To Jones & Young Mortgages
Mark Jones & Richard Young and the team at Jones & Young Mortgage Specialists are professional mortgage advisers with over twenty years of experience in helping contractors obtain the mortgages they deserve through high street and specialist mortgage lenders depending on their requirements and personal circumstances.
As specialist brokers, we look at the options open to you and how best to present your income to mortgage lenders. We can use your day rate, salary and dividends or net profit depending on how your limited company is set up for tax and how much income you take. We also have lenders able to use your retained profits as income. For sole traders, we can use your net profit (taxable pay) or your day rate for contractors. As contractors can use their contract as income proof, if you are new to contracting and have industry experience you only need to have been contracting/trading for 1 month.
Regardless of the way you earn your income we guide you through the mortgage application process, completing the mortgage application on your behalf and discussing the pro’s and cons of each part of the application. No more trawling through banks or building societies, sitting in endless appointments until you find a lender that can work with you. We help you at a time that works for you and ensure your mortgage application goes smoothly.
Together we have helped hundreds of customers get the mortgage they deserve. We offer a fully independent and whole of market approach, ensuring customers are able to access the mortgage deals they need without delays and with more reliable outcomes.
10+ Years as a Mortgage Advisor
Self-Employed Mortgage Specialist
Whole of Market Access
Receive The Mortgage Deals You Deserve
We have over 20 years of experience in helping self-employed contractors like you find the mortgages they need. Even if you’ve struggled to find a mortgage through other channels, we may have access to many specialist lenders that may be able to help.
How Do You Calculate What A Contractor Can Borrow?
The amount self-employed contractors can borrow depends on a few factors which you can view below or you can view our Contractor Mortgage Calculator.
As mentioned, mortgage lenders will use your gross income (before tax and other deductions/expenses) to assess how much you can borrow. Contractor mortgages are based on this gross income and this often allows for a larger mortgage than previously possible based on company accounts.
As with any type of mortgage, your credit history will significantly impact how much you can borrow. If you have a good credit history, this demonstrates to lenders that you are reliable and likely to meet your repayments. Therefore, you’re more likely to be able to have maximum borrowing and a lower rate. However, if you have an adverse credit history or a bad credit rating, working with a specialist mortgage broker such as ourselves, can mean you’ll still be able to access some of the best deals. We always advise checking your credit report before applying for a mortgage and can help you obtain a credit search.
The size of your deposit will also impact how much you can borrow. You can get a contractor mortgage with a minimum of a 5% deposit. If you can put down a larger deposit, you’ll benefit from lower rates, as the lender will consider you less of a risk. Contractor-friendly mortgage lenders will also take this into account during your mortgage application.
This ratio, which compares your overall debt to your income, is used by mortgage lenders in their calculators to determine your ability to manage payments. Should you have a high level of unsecured debt comparative to your income many lenders have a limit over which they are not prepared to lend. By using your day rate rather than your taxable income, this can help increase your income and alleviate their concerns.
Up To 95% Loan To Value (LTV)
Loan to Value(LTV) options typically up to 95%
Clear and concise advice about the best options for your needs.
Helping customers cut through the noise to understand things their way.
The difference between how your income is calculated can save you thousands.
Specialist Rates From Mortgage Market
Most competitive rates ensure the best price for customers
Need Help Securing A Contractor Mortgage?
Navigating the mortgage landscape as a contractor can feel like charting unknown territory. But with Jones and Young, you’re never alone on this journey. We understand the unique challenges contractors face, and we’re here to turn those challenges into opportunities. Our dedicated team is committed to not just finding you a mortgage, but the right mortgage. One that aligns with your aspirations, financial situation, and future goals.
So, if you’re seeking a partner who’ll champion your cause and guide you every step of the way, look no further. Let Jones and Young be the key to unlocking your contractor mortgage dreams.
WANT TO TALK TO ONE OF OUR MORTGAGE EXPERTS?
Helping professional contractors, freelancers, and CIS subcontractors navigate the mortgage process and get the best possible deal by arranging mortgages using your annualised contract rate.
When it comes to mortgages, navigating the process can be overwhelming for anyone. However as a contractor it may feel like deciphering a different language
Contractor Mortgage Broker FAQs:
We’ve answered some of the most frequently asked questions about contractor mortgages below:
A contractor mortgage isn’t just another mortgage—it’s a testament to the evolving world of work. Tailored specifically for professionals who embrace the flexibility of contract roles, these mortgages recognise the unique financial profiles of contractors. With Jones and Young, you’ll find that a contractor mortgage is more than just a loan; it’s a commitment to understanding and catering to the diverse needs of today’s workforce. Find out more information on mortgages for contractors.
While many believe that contractors face a steeper climb in the mortgage world, the reality, especially with Jones and Young, is much more optimistic. We’ve dedicated ourselves to ensuring that contractors, with their distinct financial footprints, have a clear and accessible path to homeownership. With the right expertise and understanding from self employed mortgage lenders, what seems challenging becomes a journey filled with possibilities.
Mortgage contracts, like any agreement, come with terms and conditions. While breaking a mortgage contract is possible, it’s essential to approach such decisions with caution and knowledge. Penalties and implications can arise, but with Jones and Young by your side, you’ll be equipped with the insights and guidance to make informed choices. We’re here to ensure that every step you take aligns with your best interests and will liaise directly with mortgage providers to ensure you secure mortgage you.
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