Accord Mortgages is the latest lender to launch into the contractor market with a new “common sense” approach.
The lender is offering mortgages to a wide range of contractors providing they have a five per cent deposit and a minimum income of £300 per day or an income of £50,000 per annum. A maximum of 46 weeks of income can be used from their current contract to work out the maximum loan size.
Applicants will require a minimum 12-month track record of contracts with a minimum of three months remaining on the current contract. If there are less than three months remaining with their current job, then they must have a two-year track record of contracting work.
For current and previous contracts covering the last 12-month period and for PAYE/Umbrella Companies the latest three payslips or invoices will be required, plus the latest three months personal bank statements.
Aaron Strutt, product director at Trinity Financial, says: “More of the lenders have started offering contractor mortgages and they often work out the maximum loan size using the day rate multiplied by five and then again using 46 weeks.
"The lenders do not charge a premium for their contractor rates and less of them are concentrating on the IT sector, making the products more widely available.”
Accord Mortgages is accepting gaps of up to eight weeks during jobs as standard and will consider longer breaks between work if there is a good reason. Day one contractors may be considered in some circumstances and agreed on a case by case basis.
Trinity’s brokers will have direct access to a mortgage manager to ensure the application progresses efficiently.
How long does it take for the mortgage to be agreed?
Accord is currently taking nine days on average to produce mortgage offers and 18% of applications will have their property valued by a computer, rather than a valuer visiting the property. This is often beneficial because the mortgage offer is provided much quicker.
How many lenders offer contractor mortgages?
Trinity Financial has access to at least 50 banks and building societies offering contractor mortgages. Most of them will have different acceptance policies, and some will be more generous than others.
Recent case studies
We recently helped two clients working as contractors in the music industry to secure a £600,000+ mortgage. They had been on a three-month sabbatical and had just returned to work for a new company. Click here for more information.
Call Trinity Financial on 020 7016 0790 to secure a contractor mortgage