Contract-based roles are becoming more commonplace in every type of industry. Whether you’re a teacher, IT contractor, engineer or even a manager. But as many lenders will consider these roles to be less secure than a permanent role, it can be more difficult for contractors to get mortgage approval. The best route to securing a mortgage is by using a lender who will consider your circumstances individually.
Getting a mortgage as a contractor
There are now more people in contract, freelance and self-employed roles than ever before. These types of jobs are becoming a new trend, as the younger generation in particular favour project-based work. This is because they offer more flexibility and variety than a fixed job.
But as contract work hasn’t always been the norm, many conventional mortgage lenders are still in the mind-set that if you have a contract-based job then your employment status is less secure than a permanent one. In addition, depending on your job role, your work hours and income might not be consistent from one month to the next. These factors lead many lenders to believe that you might struggle to afford mortgage repayments, despite whether or not your most recent payslips prove otherwise.
This means that many people in these types of roles might struggle to get mortgage approval with high-street or traditional mortgage lenders.
Mortgage approval for contractors
As a contractor, you might need to provide mortgage lenders with more information for them to consider. The best chance you have at getting a mortgage approval is if you choose a lender who will consider applications on a case-by-case basis.
Other ways that can improve your chances of getting mortgage approval include:
Saving for a larger deposit
A larger deposit will increase your chances at getting mortgage approval. This is because you will be borrowing less money for your mortgage, reducing your potential risk.
Your credit history
Your credit score plays a huge role in your mortgage options. Before applying you should check your credit score with a credit company such as Experian or Check My File. This will give you a good indication of what types of rates you are eligible for.
If you do have bad credit then as a specialist broker we can look into your individual circumstances and help source an appropriate mortgage lender.
Having a partner on the mortgage that is in a permanent role rather than also on a contract can help strengthen your mortgage application. This is because the responsibility of repaying the mortgage will be split between more than one person.