MORTGAGE BROKER IN KENT, LONDON & SOUTH EAST
FIXED TERM CONTRACTOR MORTGAGES
A Fixed Term Contractor mortgage is a product that is tailored for freelancers and contractors with fixed-term contracts. It considers their unique employment and income patterns, differing from standard mortgages designed for permanent, salaried employees.
Key Features
Designed for contractors and freelancers with fixed-term contracts
Considers unique employment situations and income patterns
Can be used for residential or buy-to-let investment mortgages
Allows more flexible income assessment, potentially enabling higher borrowing
What Is A Fixed Term Contractor Mortgage?
A Fixed Term Contractor mortgage is a type of mortgage designed specifically for individuals who work as contractors or freelancers on fixed-term contracts. These mortgages take into account the unique employment situation and income patterns of contractors, which can be different from those in permanent, salaried positions.
Who Is A Fixed Term Contractor Mortgage For?
Fixed Term Contractor mortgages are suitable for individuals who work on a contract basis, either as self-employed contractors, freelancers, or through an umbrella company. These mortgages cater to those who have a history of working on fixed-term contracts, typically ranging from 6 months to a few years, rather than being permanently employed.
What Are The Advantages Of Fixed Term Contractor Mortgages?
Provides access to mortgages for contractors, who may struggle to get approved for traditional mortgages due to their employment status.
Lenders consider the contractor's contract history and future contract prospects when assessing affordability.
Allows for a more flexible approach to income assessment, taking into account overall contract terms, day rate, and anticipated future earnings. This generally allows the applicant to borrow more than with a standard mortgage lender.
What Are The Disadvantages Of A Fixed Term Contractor Mortgage?
Interest rates may be slightly higher compared to traditional mortgages for permanent employees.
Stricter lending criteria and documentation requirements may apply.
Lenders may require a larger deposit or proof of a consistent contracting history.
Examples Of Where A Fixed Term Contractor Mortgage Can Be Used
Purchasing a residential property to live in, buying a property for investment or buy-to-let purposes.
Remortgaging an existing property.
Borrowing against a contract value, rather than drawings from a business, which can be lower.
Process And Documentation Required For A Fixed Term Contractor Mortgage
Proof of current contracts, detailing contract duration, daily or hourly rates and a start date.
CV or work history demonstrating a consistent track record of securing contracts in the same field.
Financial accounts or tax calculations for the previous 1-3 years to verify income.
Confirmation from a recruitment agent to confirm that finding alternative contracts elsewhere, would be feasible.