Getting a Mortgage As a Self Employed Contractor

sare^baw's

sare^baw's

sare^baw's

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Im 47 and i have had mortgages in the past. Im currently private renting in England and im considering buying a house with a budget of 150k. I have been working as a self employed contractor for a large well known company now for 14 months and recently i received another years contract. Before this i was unemployed for a while and my employment history was not so good. I also work through an employment agency and they pay my wages and handle the contract etc. I pay an accountancy firm to do my finances etc.

How easy is it to get a mortgage with a 10% deposit given my circumstances, it looks like ill be in this job for another few years although there is no guarantee with any job. Can i apply for any mortgage deal i see or should i seek out certain types of lenders than lend to someone like me?

I dont like the idea of going to a broker, one, because they charge a fee or are commision based and so i they might give me a product that benefits them. Two, i dont trust these kind of people due to a past experience. Im more than capable of handling the full process myself, i just dont know what lenders are likely to lend to me. Is a broker the best way to do this?
 
I know you said you don't like the idea of a broker but it would make the process far easier. Try asking any friends etc to see if they have used one in the past and can recommend one to you. It will generally make the process much smoother and easier.
 
Speak to a broker, they'll charge you between £250-£400 and will be able to get you a mortgage. If you try to do it yourself you'll end up spending hours trying to speak to people (most only deal with brokers) and chances are you will end up being rejected and it affecting your credit rating.

I can give you the details of a broker I have used before and Im self employed (well director of my own limited company but treat the same from a mortgage company) if you dont know of one.
 
I looked at all the available mortgage options for self employed/freelancers before buying our current house. I found the perfect mortgage via YBS, had an approval in principle but I let it lapse due to not finding a house. When we did find a house, the amount they would lend us had dropped 20% for no reason!

I ended up getting a mortgage via my accountants who had recently added mortgage brokers to their company. It was very quick to go through and they found the best rate and the amount we were looking for. It ended up being Halifax as the lender, who we happen to bank with, so it's all tracked through our online banking.

They did take a fee but it allowed us to get the house we wanted at a rate we were happy with (1.44%). They didn't need 2 years of accounts but simply my current contract and next contract to show my daily earnings.

https://www.crunch.co.uk/marketplace/mortgages/
 
Surely this is the exact situation where a broker is worth it?

I used one as a normal employed residential first time buyer, simply because i know him professionally and I'm not paying for the pleasure. The product he's getting me is identical to the first one I found using Halifax's mortgage calculator :D but it's streamlined the process for me. Wouldn't have bothered if I'd had to pay though.
 
smokedog said:
I think you need 2 years of books. If not, the lender needs to take your previous employment into consideration.
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Ok thanks for the advice. I hope i can find something with just one years books, i was unemployed before this.

Maccy said:
I'd suggest you take a look at this - http://www.moneysavingexpert.com/mortgages/mortgage-guide

Particularly chapter 5
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Great and thanks for the link its helpful indeed. Thankfully i have all the proof i might need, lets hope that is enough.


yogibear88 said:
I know you said you don't like the idea of a broker but it would make the process far easier. Try asking any friends etc to see if they have used one in the past and can recommend one to you. It will generally make the process much smoother and easier.
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Yes it does seem like a broker is the way to go. As i just moved here last June i dont know anyone who has gone through this process.

Mark M said:
Speak to a broker, they'll charge you between £250-£400 and will be able to get you a mortgage. If you try to do it yourself you'll end up spending hours trying to speak to people (most only deal with brokers) and chances are you will end up being rejected and it affecting your credit rating.

I can give you the details of a broker I have used before and Im self employed (well director of my own limited company but treat the same from a mortgage company) if you dont know of one.
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Im the same as you im limited company too. I guess the broker rates are not too bad given it may be the only way to find a lender who is willing to entertain my application. I was going to find a broker locally. I would like to see who im dealing with rather than doing it long distance over the phone etc.


tsinc80697 said:
I looked at all the available mortgage options for self employed/freelancers before buying our current house. I found the perfect mortgage via YBS, had an approval in principle but I let it lapse due to not finding a house. When we did find a house, the amount they would lend us had dropped 20% for no reason!

I ended up getting a mortgage via my accountants who had recently added mortgage brokers to their company. It was very quick to go through and they found the best rate and the amount we were looking for. It ended up being Halifax as the lender, who we happen to bank with, so it's all tracked through our online banking.

They did take a fee but it allowed us to get the house we wanted at a rate we were happy with (1.44%). They didn't need 2 years of accounts but simply my current contract and next contract to show my daily earnings.

https://www.crunch.co.uk/marketplace/mortgages/
Click to expand...

Sounds great and im glad this process worked for you. I bank with the Halifax too but im not sure if that would help my application in any way. I need to contact a few local brokers and get an idea what fee's they charge and what they might be able to offer me. I can always ask my accountancy firm too and see if they have a mortgage broker service too. It looks like brokers are a necessary evil in this situation and ill just have to bite the bullet and pay the fee's

Skillmister said:
Surely this is the exact situation where a broker is worth it?

I used one as a normal employed residential first time buyer, simply because i know him professionally and I'm not paying for the pleasure. The product he's getting me is identical to the first one I found using Halifax's mortgage calculator :D but it's streamlined the process for me. Wouldn't have bothered if I'd had to pay though.
Click to expand...

Yeah sounds like you did the right thing. I have had bad experiences with brokers in the past. I would rather avoid as i am well capable of applying myself but as already said they are needed on this occasion.
 
Both myself and the OH are classed as self employed due to owning more than 25% of our LTD company. We used a broker who gets his fee from the lender. Didn't cost us and was brilliant.

He comes highly rated on Pistonheads too. Sarnie is his username and he's based in the midlands too
 
sare^baw's said:
Im 47 and i have had mortgages in the past. Im currently private renting in England and im considering buying a house with a budget of 150k. I have been working as a self employed contractor for a large well known company now for 14 months and recently i received another years contract. Before this i was unemployed for a while and my employment history was not so good. I also work through an employment agency and they pay my wages and handle the contract etc. I pay an accountancy firm to do my finances etc.

How easy is it to get a mortgage with a 10% deposit given my circumstances, it looks like ill be in this job for another few years although there is no guarantee with any job. Can i apply for any mortgage deal i see or should i seek out certain types of lenders than lend to someone like me?

I dont like the idea of going to a broker, one, because they charge a fee or are commision based and so i they might give me a product that benefits them. Two, i dont trust these kind of people due to a past experience. Im more than capable of handling the full process myself, i just dont know what lenders are likely to lend to me. Is a broker the best way to do this?
Click to expand...
Would not worry its easy to do I am in a similar situation but still saving my deposit (if you can save 15-20% deposit its much easier you get access to way better mortgage deals). Even the big high street banks will lend as they know its easy money right now. As others have said go to a broker there are many who do contractor mortgages most do not require any proof except current contract either. Look here for more specialist advice they even have a special deal from Clydesdale bank: http://www.contractoruk.com/money/contractor_mortgages.html The days of it being hard to get a contractor mortgage are over it seems so fill your boots!!!
 
I got a mortgage with one years books and accountants reference with a broker.

It did however cost more, it ended up with a specialist mortgage company Kensington which was around 4% interest or something fixed for two years.

we have just remortgaged with santander fixed for 5 and the payments have dropped £50 a month and we took 8 years of the term

in short the rate was borrow a pound pay back £1.98, the new rate is borrow £1 pay back £1.32 i think

while it was expensive initially it was worthwhile getting on the train as the house has gone up £40k in that time and the payments were the same as our rental

my mortgage broker is sound if you want to trust me i can pass on details
 
Regy53 said:
I got a mortgage with one years books and accountants reference with a broker.

It did however cost more, it ended up with a specialist mortgage company Kensington which was around 4% interest or something fixed for two years.

we have just remortgaged with santander fixed for 5 and the payments have dropped £50 a month and we took 8 years of the term

in short the rate was borrow a pound pay back £1.98, the new rate is borrow £1 pay back £1.32 i think

while it was expensive initially it was worthwhile getting on the train as the house has gone up £40k in that time and the payments were the same as our rental

my mortgage broker is sound if you want to trust me i can pass on details
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This is almost the exact same situation we were in expect we fixed for a little longer due to not being 100% sure on what the future held.

Our finance guy sorted pretty much everything out for us which would have been too much of a hassle with the "none standard" situation we were in at the time.

If we were to re-mortage now we should be able to knock years off and pay less.
 
Thanks to everyone for all the replies, i read with great interest and its good to hear that you guys managed to get a mortgage ok, this gives me hope. Im always reluctant to use the likes of brokers but i know i need to on this occasion. I decided to contact 'Sarnie' the guy mattyg suggested, this guy has a lot of recommendations on pistonheads and so i thought i would contact him given he has a lot of happy customers.

@mattyg i see you did not pay a fee to Sarnie, how long ago was this, i have talked to him on the phone and i send him in the completed form, he says the fee will be £295, i know its not too expensive but maybe the fee free service was in the past.
 
sare^baw's said:
Thanks to everyone for all the replies, i read with great interest and its good to hear that you guys managed to get a mortgage ok, this gives me hope. Im always reluctant to use the likes of brokers but i know i need to on this occasion. I decided to contact 'Sarnie' the guy mattyg suggested, this guy has a lot of recommendations on pistonheads and so i thought i would contact him given he has a lot of happy customers.

@mattyg i see you did not pay a fee to Sarnie, how long ago was this, i have talked to him on the phone and i send him in the completed form, he says the fee will be £295, i know its not too expensive but maybe the fee free service was in the past.
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Did he say who pays the fee?

I'm sure he needs to be open in how he gets paid.

I wouldn't hesitate in paying that to be honest. But then ours was a bit of a pain to sort. Yes we may have been able to sort it ourselves but I didn't have the time.

We used Liam (Sarnie) Sept 2015

HTH
 
mattyg said:
Did he say who pays the fee?

I'm sure he needs to be open in how he gets paid.

I wouldn't hesitate in paying that to be honest. But then ours was a bit of a pain to sort. Yes we may have been able to sort it ourselves but I didn't have the time.

We used Liam (Sarnie) Sept 2015

HTH
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He did not say directly that i pay this fee but it looks clear that i should be the one to pay the fee. He may well have started charging these days.

In his email he said 'We charge a one off lifetime client fee of £295, which isn’t payable until we have secured you a mortgage and you’ve had an offer accepted on a property and we are underway'

On his website it says 'There may be a fee for mortgage advice. The precise amount will depend upon your circumstances but we estimate that it will be £195.'
 
Im still waiting while the broker is doing the application and waiting on a reply.


Im used to buying and selling in Scotland. Im in England now. Does a fixed price mean that is the price you pay or can i still offer less? Does offers over mean i need to offer more on the asking price, is offering less likely to be rejected? What is the normal amount to pay when its offers over.

Do i need to pay for a survey fee for each house i want to put an offer on? Do i need to pay the lawyer a fee for every property i make an offer on? In Scotland the seller has to pay for the survey for buyers to see, is it different in England?
 
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In England you generally offer under the asking price depending on demand in the area. I've always offered about 10% less and then ended up negotiating, sometimes the seller won't budge but it's worth a try.

The buyer pays for any surveys if they want to do one, but you don't need to worry about that until you're well down the road of the purchasing process, long after you've made an offer.

Be warned though, buying a house in England isn't a quick process!
 
I've used contractorfinancials twice before (http://www.contractorfinancials.com/) and would have no qualms about using again. I think they might have changed a bit over the last few years as last time they contacted me they mentioned I'd have to sort out own Experian (or similar) check and I think now have to pay a fee where as before it was always the lender. However, I don't think that matters to be honest as either way we'll probably pay for it.
They can either use three years of records or contract rate and ideally needs to have 6 months on the contract at time of application. I managed to get a mortgage under changing circumstances as some of the lenders they access are old school and will look at the overall picture, unlike many lenders these days who have daft criteria you need to meet (ie, x amount of earnings but they ignore savings and investments you might have).

Regarding offers, you can offer what you want. Don't be afraid to offer less than the asking price - what do you think it's worth? Don't pay over the odds if you thnk it's not worth it. The market is quite difficult right now (for sellers), don't let the press or agents tell you otherwise.
 
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