25th April 2019
We understand that getting a Contractor Mortgage can feel like an overwhelming and complex process – especially if you don’t know when to start. Here are 5 top tips help you successfully secure your mortgage.
When you’re self-employed, it’s important to make sure you give the lender or broker all of the required documents to prove your finances (and in a timely manner to help efficiency!). In doing so, the lender will have an accurate view of your finances and how much you can borrow. Typically the paperwork required includes your ID and proof of address, such as driving licence and passport (make sure they’re correct and in date), as well as proof of your income – you’ll need to provide a combination of the following: 3 months bank statements, 3 years of company accounts or SA302.
Before getting a Contractor Mortgage, it is best to know what your credit rating looks like. This is one of the factors lenders will use to assess your application. There are many different credit reference agencies you can use but Experian is used by most mortgage lenders so they’ll be able to give a better idea of where you’re likely to be accepted. If your credit rating isn’t the best, there are many things you can do to help improve it. Including registering on the electoral roll, or closing down old credit cards and current accounts. You can find out more ways to improve your credit rating here.
The minimum deposit required for any mortgage (including a Contractor Mortgage) is 5% of the property value – for example, if you are looking to buy a home worth £350,000, you’ll require a minimum deposit of £17,500. However, having a bigger deposit can work in your favour as you’ll need a smaller mortgage. This makes you less of a risk than a borrower with only a small deposit and a larger mortgage loan. You’ll also need to consider other costs such as stamp duty (not if your a first-time buyer), solicitor fees, mortgage product/application fees and surveyor fees.
When reviewing a mortgage application, most lenders will look at all of your current outgoings to determine how easily you’ll be able to afford the mortgage repayments. If you currently have unsecured loans or balances on credit cards, it might be worth using some of your savings to reduce the amount due, as this could have an impact on your borrowing potential if you still have them at time of application.
We understand that getting a Contractor Mortgage isn’t a very simple task. If you’re struggling to find the right mortgage deal, or you don’t know what you’d be eligible for and how much you can borrow, it may be a good idea to speak to a Contractor Mortgage specialist. Here at Broadbench we will work with the whole of market to help you through the complex application process so you don’t have to go it alone.
With these handy tips we believe you’ll be able to secure your Contractor Mortgage but if you have any questions, get in touch with our expert Mortgage advisers.
All content is accurate at the time of publication
What is remortgaging? Remortgaging is the process of switching your existing mortgage product to a new mortgage product, either...
Whether you’re currently a homeowner or looking to get yourself on the property ladder, you’ve probably wondered as to...
Has your monthly mortgage repayment increased? This may be an indication that your fixed rate or tracker rate mortgage...