Freelancer Financials is urging all contractors to consider reviewing their mortgage arrangements in the wake of a number of recent rate reductions by some of the UK’s largest contractor friendly lenders.

As the largest Contractor Mortgage specialist in London, Freelancer Financials has welcomed in the New Year with a number of exciting rate cuts.

We have some fantastic mortgage rates to announce

Many of the lenders we have worked closely with over the years to facilitate “Contract Based Underwriting” are cutting their interest rates and even going as far as reducing rates for contractors with a 10% deposit to 4.65%. That’s great news considering that, only a few months ago, rates were 5.95%.

“A number of contractor friendly lenders have made huge rate reductions in the past week, in part fuelled by the government’s launch of Funding for Lending scheme designed to incentivise banks to increase lending to individuals and businesses,” says John Yerou, MD of Freelancer Financials. “This is fantastic news for those contractors with existing mortgages who are interested in securing more attractive, fixed rate deals providing greater long-term security in today’s difficult times. These rates are currently the lowest since the economic crisis began in 2008.”

Breaking news - IT contractors with no trading accounts can get onto the property ladder with as little as 10% deposit. We can secure you a 2 year fixed rate mortgage at only 4.99%. All we need is a copy of your contract. Surely this must be cheaper than renting!

Even better news for those contractors with a larger deposit, Furness Building Society are offering Contractors with a 20% deposit, a two year 3.20% fixed rate for both purchase and remortgage. It also comes with a free valuation and legal service for remortgage clients.

Those contractors who are fortunate enough to have 40% deposit can now secure rates as low as 2.49% from banks like Clydesdale and Nationwide. So if you’re a home mover or considering remortgaging for a better rate, there is no time like the present.

Applying direct can cost you the mortgage

Before attempting to apply for any type of mortgage borrowing, we strongly recommend that you speak with a Contractor Mortgage Specialist first. It is important to note that attempting to apply to lenders direct on a “contract basis” can be difficult and may result in your application being unsuccessful.

Freelancer Financials are the largest contractor mortgage specialists in London. We are able to utilise bespoke underwriting with lenders, to offer you borrowing based on a multiple of your gross contract earnings and not just the Taxable Element. As a contractor you can potentially borrow up to 4.5 times your annualised contract rate, so a contractor earning £350 per day could secure borrowing up to £378,000.

At Freelancer Financials we make sure your application is processed by senior underwriters who are completely familiar with “contract based underwriting”.

What documents do I need to secure a Contractor Mortgage

All you need is a copy of your current contract, two forms of ID and recent bank statements, we’ll do the rest. We can even secure you an agreement in principle on the same day as you make your enquiry.

If you want to find out what you could potentially borrow to buy your first property, move home or remortgage to save payments our team of professional advisers are waiting to help.

As Christmas and New Year fade into the background, many people’s thoughts may turn to house purchase, whether they are prospective first-time buyers or growing families needing more space or a better location. So, the brief homebuyer hibernation around the holiday period may show signs of ending before the daffodils bloom. This means it is not too soon now to explore mortgage options and all the other things linked to home ownership, including the essential range of insurance cover.

After several years in the economic doldrums that followed the global financial crisis, the housing market may see better times in 2013. One of the most authoritative sources on market activity is the Council of Mortgage Lenders (CML), whose members, mainly banks and building societies, account for about 95% of UK residential mortgage lending. One of its regular reports, issued late-November, painted a positive picture, suggesting recent market weakness might be coming to an end, partly due to the official Funding for Lending scheme that helps lenders to meet borrowers’ needs.

Mortgage lending on the up

The CML’s estimates showed total gross mortgage lending of £12.9 billion in October, around 4% up on the previous October. Chief economist at the CML, Bob Pannell, pointed out: “House purchase and remortgage activity both appear to have picked up recently, and this should be supported by an improvement in the availability and pricing of mortgages. The Funding for Lending Scheme is likely to have made an early positive impact, helping to counter some of the negative pressures associated with a protracted and weak economic recovery.”

The CML reference to remortgaging is also interesting as it highlights that many homeowners have been finding new mortgage deals as existing arrangements come to an end or in situations where they have had a mortgage for some years and discovered that its terms were no longer as competitive as they might be. So, whether you are a homeowner –planning to move or staying put – or a prospective first-time buyer, the early weeks of 2013 may present a great opportunity to seek professional advice on the mortgage deals currently available. First-time buyers wanting a new-build property have the added incentive of the NewBuy scheme. This may, in the CML’s words, “allow you to buy a home with a lower deposit than a lender would normally need.”

Buying your new home will inevitably involve the need for insurance cover. Making certain that mortgage payments will continue if accident, illness or other misfortune strike should be a priority. Your adviser can tell you about mortgage protection, critical illness and other cover to help your family cope financially in difficult circumstances. It is also essential to cover both buildings and contents for risks like fire, flood, subsidence and burglary.

Since the Bank’s Funding for Lending scheme (FLS) was launched in August the market has seen the benefit of cheaper lending filtering through mortgage lenders over the past few months.

Major high street banks took £4.4bn in cheap funding from the Bank of England to encourage more lending to First Time Buyers and Home Movers. A number of the banks that received funding included contractor-friendly lenders such as Halifax, Clydesdale, and Virgin Money. This has lead to fantastic reductions in their interest rates, especially over the past few weeks.

Clydesdale Bank last week introduced a 2 year fixed rate starting at 2.49%, and Halifax 2.79%. Virgin Money has also joined the race to reduce rates by slashing their fixed rates down to 2.68% this week. All good news for contractors looking to secure a competitive mortgage based on their contract rate alone!

Mortgages based on a multiple of your contract earnings

At Freelancer Financials, we can secure you a competitive mortgage from high street lenders based on your contract rate alone. This also means that you don’t have to rely on the traditional method of using accounts, pay slips or tax returns, which is unlikely to reflect the total earnings that you have at your disposal for income verification on a mortgage application. The mortgage loan can be as much as 5 times your annualised contract earnings based on 48 weeks.

Click here to calculate how much you could borrow as a contractor

Contractors that we speak to, tell us of their disappointment when they have approached their bank or a lender direct for a mortgage.

Many contractors operate through a personal services company and operate in a tax efficient way, or others just don’t have 3 years trading history as they have recently started contracting.

Bespoke underwriting for contractors, NO accounts required!

We have worked tirelessly over the years to develop strong relationships with strategic high street lenders to simplify the underwriting process that verifies contract earnings for lending purposes. The key here is to ensure that the application is properly packaged and falls in front of the right decision makers rather than using staff in branch networks.