As professionals in the sector increasingly become aware of the benefits associated with contract positions. Companies are also consistently looking for contractors to supplement their workforce for set periods of time.
Despite this changing employment landscape within the IT sector, many IT contractors have the same issue when it comes to a time when they want to purchase a property – lenders will often perceive them as a higher risk and introduce a raft of measures that can be off-putting. This can happen despite contractors having a steady income, a large & varied skillset and a host of other favourable assets going for their application.
Why is finding a good IT contractor mortgage difficult?
Like with any contractor position, job security & a steady source of income are the main aspects going against you when it comes to securing a contractor mortgage.
Unlike those who receive a set salary every single month, contractors don’t have the same annual salary that mortgage lenders can track.
The majority of IT contractors will have an income that will fluctuate on a month-to-month basis. Even if your annual income far surpasses the national average, it may still not be seen as secure. This is purely because you are viewed as being in a less stable position, than somebody in full-time employment.
Lenders are concerned that you may suddenly find yourself in a position where your work has dried up for a couple of months, which may result in you being unable to keep up with your repayments.
Before the financial market crashed in 2008, the process for securing a contractor mortgage was much more straight-forward. However, with this, many people misled mortgage brokers as to how much they actually earned. This led to thousands upon thousands of people ending up in debt that they could not afford to repay.
Because of this, the Financial Conduct Authority (FCA) has put regulations in place, to ensure that lenders must be much more cautious when it comes to handing out mortgages, to those that are self-employed.
Obviously, this is frustrating for any type of contractor, but Super Contractors will help you every step of the way to help secure you with the best mortgage we possibly can.
What can I do to help me get an IT contractor mortgage?
Even though there are a limited number of lenders that contractors have available to them. We work with some fantastic people, that specialise in IT Contractor mortgages. They are contractor-friendly and supply mortgage products based on day rates.
All you need to do is gather your accounts & provide evidence of your income. This will enable lenders to confirm if you earn enough & a stable consistent flow of income to afford a mortgage.
Even though high-street lenders may traditionally make it more difficult for IT contractors to get a mortgage, there are several things you can do as an IT professional which will make your application more likely to be successful.
While there are a number of factors to consider when applying for a contractor mortgage, it’s also important to note there is no ‘one size fits all’ approach, and lenders should consider your application on its own merits. Getting professional advice from a mortgage broker or advisor will generally benefit you in the long run, with most offering a free consultation for their services.
There are a number of things you can do as an IT contractor which will improve your chances of getting a mortgage:
- Offer a larger deposit – borrowing less money from the lender reduces the risk on their behalf
- Maintain a good credit rating – as with any mortgage application, it is important to ensure your credit rating is in good shape.
- Avoid lengthy contracting breaks – whilst flexibility is a major benefit of contracting, having a major period of inactivity is not likely to be looked upon favourably.
- Show evidence of long-term contracts – ongoing and lengthy agreements with employers show stability and reliability for your application.
IT Contractor Mortgages at Super Contractors
At Super Contractors, we know the hassle that can come with attempting to shop around for your mortgage, particularly when you are working in a sector as broad and time consuming as IT.
We always recommend getting professional advice on your contractor mortgage as it can end up saving time and money in the long run.
Our mortgage specialists are trained to understand contractor-specific challenges and we only work with contractor-friendly lenders. Contractors come to us because of our specialist mortgage advice, speedy turnaround and super friendly service designed wholly around the needs of contractors.