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A mortgage is likely to be the biggest financial commitment that you will ever enter into and there are a host of banks and lenders offering a mind-boggling array of different mortgage options and deals.
But frustratingly, many of these mortgage options and deals are cut short when it comes to being self-employed. Whether you operate through a limited company or switch to an umbrella company in the future, the reality is that most banks and lenders simply don’t understand the way you work as a contractor, freelancer or small business owner.
When lenders assess a mortgage for the self-employed, they will typically want to verify income by seeing two to three years’ worth of accounts or tax returns. Tricky if you’ve just started out as a contractor.
Moreover, limited company contractors will quickly find that lenders won’t take their full income into account, as any money retained in the company, for tax planning purposes, will not be considered. This means you’re unlikely to be offered a loan reflecting your true borrowing potential.
However, let’s say you can overcome this first hurdle, you will then face another challenge. Generally, banks and building societies only lend to those who are considered low risk, and contractors just do not tend to fall into this category. The reason being is that lenders worry that these individuals will struggle to afford their monthly payments when their current contract comes to an end.
Choosing a specialist mortgage broker is vital if you want to avoid the hassle of dealing with lenders who do not understand the contracting world. Therefore, we at Caroola recommend the UK’s leading specialist contractor mortgage broker, CMME.
CMME will conduct a full market assessment to find the best possible mortgage provider for your needs and financial circumstances. They can also speak to you about your options should you be considering switching to an umbrella company – either way, CMME will work on your behalf to secure a mortgage offer based on your true borrowing potential and risk profile.
Whether you are looking to take that first step on the ladder, re-mortgage or invest in a Buy to Let, CMME can help. Speak to your Caroola accountant today. Or call CMME directly on 01489 555 080 and reference Caroola for a free consultation.
Alternatively, fill in the call back form below, to be contacted at a time that’s convenient for you.
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