At last competitive mortgages for contractors

Last year when the Bank of England base rate dropped to 0.50% the mortgage industry entered unchartered waters. Initially, first time buyer contractors looking to take their first steps towards owning a property were excited with the reduced base rate; only to see that the reductions in base rate was soon wiped out as lenders rushed to increase the margin of interest to which they track the Bank of England (BoE) base rate. They referred to this as their “margin for risk”.

The fall in BoE base rate was fantastic news for all those contractors who had already secured tracker rate mortgages with us. Although contractors with existing tracker mortgages saw a huge benefit in the reductions, first time buyer contractors looking to secure a new mortgage lost out as high street banks increased their interest rate margins and arrangement fees. With the FSA introducing tougher regulation and lenders restricting mortgage lending, first time buyer contractors with deposits less than 25% found it near impossible to get a mortgage.
Since mortgage rates peaked in September 2009 they have been falling steadily since. This month the average two year fixed mortgage - the bench mark of the mortgage market - stands at its lowest level in 1 year, with the average three and five year fixed rate mortgages not far behind.

Hope for first time buyer contractors with smaller deposits

High street lenders are now starting to compete with each other with the number of mortgages available reaching the highest level since September 2008. More importantly for first time buyer contractors, a significant proportion of the new mortgages now available are for those with smaller deposits, which is another welcome boost for the mortgage market.

Specialist mortgage underwriting based on contract rates alone

We’ve definitely seen more lenders taking more steps to improve the competitiveness of their mortgage deals. A number of those lenders are happy to accept mortgage applications from contractors. We have negotiated specialist mortgage underwriting based on your hourly or daily contract rate.

Mortgages for contractors in their first week of their first contract

As more high street lenders become active in the mortgage market, this is good news for contractor borrowers as increased competition is one of the key factors driving mortgage rates down. A 25% deposit remains the benchmark for the majority of the most competitive deals. However, contractor borrowers with small deposits are increasingly getting access to a wider proportion of the market. Those contractors who have only been contracting for a short time needn’t worry as we have agreed bespoke underwriting with high street lenders who accept contractors in their 1st week of their first contract.

This resurgence in the mortgage market is great news, but lending figures show that there is still a way to go before the market returns to any sort of normality.

Contractor Mortgage Specialist

Many contractors have been let down by less experienced mortgage advisors who have approached the wrong high street bank or packaged the application poorly. It is important that you understand that each failed application attempt, leaves a footprint on your credit record, making it more difficult for you to get a mortgage when you next apply. For this reason alone it is essential that you get it right from the beginning.

How Can I Get A Mortgage?

Talk to Freelancer Financials, who are specialists in the field of providing mortgage advice to contractors and freelancers. For a mortgage quote please contact our contractor mortgage specialist John Yerou on 020 8421 7998.

To find out how much you can borrow based on your contractor rate click here

If you have any questions or comments please send an email to john@freelancerfinancials.uk.com and we will get back to you shortly.

Contractors should consider fixing their mortgage

Contractors looking for the security of a fixed rate, or are undecided whether to move off their SVR should seriously look at fixing their mortgage as fixed rates have dropped to their lowest levels since 2007.

Since early 2008, the average rate of a two year fixed rate mortgage has fallen considerably, with rates at a current low of 3.69 per cent.

Three and five year fixed deals have also seen their averages reduce steadily since October 2009. Five year average rates now sit at 5.80 per cent from a high of 6.42 per cent in October 2009.

Therefore, if you are currently on your lenders SVR, now could be the time to look at your options. With the Base Rate at an all time low and only likely to increase, now may be the time to consider a fixed rate mortgage.

This is definitely positive news for borrowers considering a fixed rate mortgage. With reports that inflation is rising, it is only a matter of time before the Bank of England increases the base rate. A number of the chief economist at leading high street banks are forecasting that the Bank of England will raise the base rate by the 4^th quarter of this year. So contractors who are looking to fix their mortgage repayment should seriously consider whether now is the right time to switch.

How Can I Get A Mortgage?

Click Here to calculate how much you could borrow based on your contract rate.

Talk to Freelancer Financials, who are specialists in the field of providing mortgage advice to contractors and freelancers. For a mortgage quote please contact our contractor mortgage specialist John Yerou on 020 8421 7998.

If you want to consider your mortgage options as a contractor then utilising the services of Freelancer Financials will ensure that you are speaking to experts that understand the different ways that contractors are paid. Going direct, or to a non-specialist could lead to failed applications which could hinder your mortgage options moving forward at a time when lenders are looking for reasons to say no rather than yes to funding.

If you have any questions or comments please send an email to john@freelancerfinancials.uk.com and we will get back to you shortly.

Are you an IT Contractor struggling to get a mortgage?

Have you had a mortgage application declined for any of the following reasons?

• You have less than three years accounts

• You have been self-employed for less than 2-years

• You’ve been contracting for less than 6 months

• Your accounts don’t reflect your contract income because you pay yourself a low salary and the rest in dividend

• Your company retained profits are not taken into account when assessing your affordability

• You’re an IT Contractor and therefore considered to be a greater risk

• You have less than 12 months to go on your contract

If you have, don’t despair, the contractor mortgage advisers at Freelancer Financials are almost always in a position to help.

High Street Banks lack the experience understanding contractors

Due to the tightening of lending criteria by financial institutions we are receiving more calls from IT contractors experiencing problems getting a mortgage. Many contractors and freelancers are having their mortgage applications declined by high street banks because of the reasons highlighted above. By the time contractors have got in contact with us they are left feeling depressed and hopeless, making claims that lenders are treating them like second class citizens.

Dealing with a snotty little clerk or talking to someone in a call centre and trying to explain that your earnings should not just be based on your declared salary can be frustrating; especially when successfully buying your future home is based on the decision being made by someone who doesn’t understand the tax efficient manner in which you are paying yourself.

As an IT contractor applying for a mortgage, you don’t have to put up with the embarrassing situation of having your mortgage application rejected by a bank clerk who clearly doesn’t understand the contractor’s world or have the financial acumen to understand the make-up of your contract income. At Freelancer Financials, we have the experience and expertise to be able to arrange Mortgages for most IT contractors without too much of a problem.

Mortgages for IT Contractors by Specialist Mortgage Brokers

At Freelancer Financials we can arrange competitive mortgages that are based on your contract rates alone. We work closely with senior underwriters who completely understand the way you work. All we need from you is a copy of your CV and most recent contract and we do the rest!

How Can I Get A Contractor Mortgage?

Talk to Freelancer Financials, who are specialists in the field of providing mortgage advice to contractors.

For more information you can also read our overview of Contractor Mortgages

For a mortgage quote please contact our contractor mortgage specialist John Yerou on 020 8421 7998 or request a Call Back

Although many IFAs and mortgage brokers charge a fee for arranging a mortgage, at Freelancer Financials we are happy to deliver this service without charging you a broker fee.