As a Maidenhead mortgage broker that’s been in business for almost two decades, we’ve built a reputation as being not only an award-winning mortgage broker, but also a specialist mortgage broker. And whilst we’ve become experienced in a number of specialist mortgages over the years, the one we’re going to focus today is IT contractor mortgages.
But what is an IT contractor mortgage and why is it worthy of its own article? Read on to find out.
Getting an IT contractor mortgage
It’s estimated that there are around 100,000 IT contractors in the UK. That’s a lot of people, most of whom are likely to want to buy their own home at some point in their career.
The problem with applying for an IT contractor mortgage in the UK is that the lender automatically treats the applicant as self-employed.
This means that before you’ve so much as spoken with an IT contractor mortgage broker, you’re already looking at managing the challenges faced with applying for self-employed mortgages.
However, on the flipside, of all the professions to work in as a freelancer, IT is generally viewed as one of the most stable.
How predictable is your income?
Self-employed mortgages have their own nuances, which, if not handled correctly, could mean the difference between getting a mortgage and not getting a mortgage.
If you’re self-employed, then a lender is likely to assume that your income is less predictable than someone who’s working for a company and taking a salary (even though nothing in life is guaranteed… not even when you’re working for someone else!).
However, a good UK specialist mortgage broker knows that nothing’s ever black and white when it comes to applying for a mortgage. And this certainly applies to applying for self-employed mortgages.
How much can I borrow as an IT contractor?
As a rough ball park figure, if you’re a contractor you can generally borrow a figure based on your day rate, the number of days you work a week and the number of weeks you work each year.
Whilst this calculation will provide you with an average annual income figure, it doesn’t take into account any dips in earnings, which, as a self-employed person, you may be more vulnerable to than an employee.
And this is where the benefits of using a mortgage broker become clear.
Help with getting an IT contractor mortgage
A specialist mortgage broker not only understands the nuances around how self-employed people pay themselves – whether that’s by dividends, salary or a mixture of the two – but also how to package together a case that presents a self-employed person’s financial position in the best possible light.
Good IT contractor mortgage brokers will know what to ask for (three years’ company accounts, details of contracts, SA302 tax calculations) and how best to package it for the lender, so that your borrowing ability is maximised and that your mortgage application isn’t rejected.
So, if you’re an IT contractor and are thinking about applying for an IT contractor mortgage, get in touch with our team of Maidenhead mortgage advisers, all of whom will be happy to arrange an initial mortgage consultation.
Contact the team directly on 01628 560820 or by emailing enquiries@altonmortgages.co.uk for expert mortgage advice in Berkshire.