IT Contractor Mortgages

IT Contractor at desk

IT Contractors: How We Can Help Secure Your Mortgage

 Are you an ๐ˆ๐“ ๐œ๐จ๐ง๐ญ๐ซ๐š๐œ๐ญ๐จ๐ซ wondering if you can ๐ฌ๐ž๐œ๐ฎ๐ซ๐ž ๐š ๐ฆ๐จ๐ซ๐ญ๐ ๐š๐ ๐ž? Perhaps youโ€™re thinking about taking ๐š ๐ฅ๐ž๐š๐ฉ ๐ข๐ง๐ญ๐จ ๐ญ๐ก๐ž ๐œ๐จ๐ง๐ญ๐ซ๐š๐œ๐ญ๐ข๐ง๐  ๐ฐ๐จ๐ซ๐ฅ๐ but have concerns about how it could impact your mortgage options? ๐Ÿ˜

At BeAdvised, we help IT contractors daily and work with several lenders with flexible criteria aimed at them.

  1. Feasibility:

Many lenders will treat day rate IT contractors as self-employed and require 2 years of accounting records which can be onerous and requires assessment over a longer period of time.

The ๐ ๐จ๐จ๐ ๐ง๐ž๐ฐ๐ฌ is that there is a growing number of lenders who have more favourable criteria. A day rate contractor can be considered in a similar way to someone employed on a permanent contract.

     2. Affordability:

Most ๐ˆ๐“ ๐œ๐จ๐ง๐ญ๐ซ๐š๐œ๐ญ๐จ๐ซ ๐Ÿ๐ซ๐ข๐ž๐ง๐๐ฅ๐ฒ ๐ฅ๐ž๐ง๐๐ž๐ซ๐ฌ will assess income by multiplying the day rate by 5 days in a week and then by 46 weeks in a year. This figure is then considered the annual income which is used along with other factors such as deposit size, typical expenditure, dependants, credit commitments, credit history etc. to determine how much that contractor could borrow.

     3.Inside or Outside IR35:

๐๐จ๐ญ๐ก ๐ฌ๐œ๐ž๐ง๐š๐ซ๐ข๐จ๐ฌ ๐œ๐š๐ง ๐›๐ž ๐œ๐จ๐ง๐ฌ๐ข๐๐ž๐ซ๐ž๐.

Some lenders may reduce the income theyโ€™ll consider for an IT contractor inside IR35 as they take into consideration additional costs incurred through operating via an umbrella company.

     4.History:

Most of the lenders we work with for day rate contractors will require ๐Ÿ๐Ÿ ๐ฆ๐จ๐ง๐ญ๐ก๐ฌ of contracting history. That said, for some, ๐Ÿ” ๐ฆ๐จ๐ง๐ญ๐ก๐ฌ contracting experience is acceptable and there is the odd lender who will consider even less.

Lenders often like applicants with shorter contracting history to have been employed in the same line of work before they started contracting.

Gaps between contracts are normally accepted if limited to a few weeks. Larger gaps are assessed on a case-by-case basis.

     5.Documents:

Typically, lenders will require:

  • Current and previous contract
  • Payslips (if within IR35)
  • Bank statements showing income receipts
  • Evidence of previous employment (for those with less contracting experience

Book in with one of our advisers today!

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