3 contractor mortgage myths exposed.

Deal Direct have more than 10 years’ worth of experience in sourcing contractor mortgages. During this time, we have repeatedly come across the same misconceptions when securing this type of mortgage. 3 of those misconceptions are exposed below:

I have heard that I need three years of accounts, is this true? No, it isn’t, but it is one the most enduring myths related to contractor mortgages. Lenders may have made this requirement in the past but, today, a mortgage is based on your contract rate. As a contractor, you are charging for your skill and expertise, as well as for your flexibility. Potentially, you could be charging a better rate than someone who is in full-time employment. How much you can borrow is calculated using this rate, not the length of time you have been working.

As a contractor, am I still considered ‘high risk’? This is a view that lenders used to take but, many more now have a fuller understanding of what it means to be a contractor. They know that, compared to some in full-time employment, you potentially represent a better risk and have refreshed their mortgage offerings, as a result. As a general guide, if you have a deposit and you bring a good credit rating to the table, you are viewed as low risk.

I’ve been told I need up to a 50% deposit. A 50% deposit is definitely not a requirement. Most mortgages offer rates based on deposits of between 10% and 25%. Since the crash of 2007, most lenders withdrew their 100% mortgages but, even though a deposit is required today, the rates are hitting record lows. This makes securing a contractor mortgage very affordable.

For all your contractor mortgage questions answered, call us now.

Speak to a Deal Direct expert on 0800 048 8828 today.