Becoming a contractor - mortgage help Becoming a contractor - mortgage help
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  1. #1

    Nervous Newbie


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    Default Becoming a contractor - mortgage help

    Hello all,

    Ive been lurking on this forum and doing lots of searching through it to try to help me make a decision on becoming a contractor.

    I work in automotive engineering, currently employed on a permanent contract but I’ve been offered a job elsewhere (same industry) in a contract position.

    My partner and I have an existing mortgage with Nationwide, 2 year fixed, fix ending in August 2018. I’m lead to believe that getting a mortgage as a new contractor is quite challenging! From searching on here I can’t find any new contractors successfully getting mortgages so I’m a bit worried we won’t br able to remortgage come August.

    Furthermore, the contract position is only financed until August, it’s likely to be renewed but no guarantees.

    Finally, we want to move house, probably closer to this position since we have family around the area anyway, so we may need to get a new mortgage on a new house with a new contract in position...

    Does anyone have any advice on “day one” contractor mortgages please? I understand there’s a few brokers recommended through the forum but from reading the threads on these, most people have 12 months contract experience.

    TL;DR - currently perky but offer of contract job, need a new mortgage come August, is it going to be difficult and should I therefore turn down the job?

  2. #2

    I live on CUK

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    Ask a mod to move this to the accounting section so you get serious answers.

    Generally -
    1. If you want to stay in the same property and your current lender has decent rates then you are unlikely to get asked to explain your finances as long as you haven't had issues paying or a poor credit record.

    2. If you want to a new mortgage or re-mortgage with a different lender then some lenders will look at your old job and your current contract then lend you a sum based on that. However you have to have a current contract. If you need to do this it is best to talk to a broker first. There are lots of threads on which brokers contractors use.
    "You’re just a bad memory who doesn’t know when to go away" JR

  3. #3

    My post count is Majestic

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    Can't have been very good lurking if you've decided General is a good place to post a sensible question.
    'CUK forum personality of 2011 - Winner - Yes really!!!!

  4. #4

    I live on CUK

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    Quote Originally Posted by northernladuk View Post
    Can't have been very good lurking if you've decided General is a good place to post a sensible question.
    Well I did warn the OP....

    Maybe we should use Mumsnet acronyms so we can be more ruthless.
    "You’re just a bad memory who doesn’t know when to go away" JR

  5. #5

    Nice But Dim

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    Quote Originally Posted by miniwill View Post

    TL;DR - currently perky but offer of contract job, need a new mortgage come August, is it going to be difficult and should I therefore turn down the job?
    Well it is cold out, have you tried wearing an extra jumper?

    Getting one in before it gets moved.
    "Being nice costs nothing and sometimes gets you extra bacon" - Pondlife.

  6. #6

    Prof Cunning @ Oxford Uni

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    This thread is now moved (Blame SueEllen for her post)
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  7. #7

    Prof Cunning @ Oxford Uni

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    My advice:
    1. You don't have to change your mortgage as soon as the fixed period has ended. You can stay with your current mortgage until such times as you have been contracting long enough to be able to secure a better deal. You only save money on changing your mortgage if you can get a new mortgage at a better rate.

    2. Move house when you can afford to. You might want to move house, but if the new one is going to be more expensive, or your mortgage isn't portable, then you're going to have to get a new mortgage. See point 1.
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  8. #8

    More time posting than coding

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    Quote Originally Posted by miniwill View Post
    From searching on here I can’t find any new contractors successfully getting mortgages so I’m a bit worried we won’t br able to remortgage come August.
    The search on this forum is not great. Don't worry, it is easy to get a mortgage and most of the contractors who want one get one.

    I got one after being a contractor for only 3 months (coming from perm). It's fine don't worry, just use a specialist contractor broker or go speak to Halifax.

  9. #9

    Still gathering requirements...


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    I was worried about this, ended up paying the lenders SVR for about 18 months before realising I could remortgage with the same lender by clicking a few buttons on their website.

    That said, if I was doing this again, my last act before chucking in the perm job might have been to secure a better mortgage deal.

    I am contemplating a further remortgage at the moment - with additional borrowing - so may soon be falling into the deathly embrace of the specialist brokers.

  10. #10

    Banned


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    Quote Originally Posted by miniwill View Post
    Hello all,

    Ive been lurking on this forum and doing lots of searching through it to try to help me make a decision on becoming a contractor.

    I work in automotive engineering, currently employed on a permanent contract but I’ve been offered a job elsewhere (same industry) in a contract position.

    My partner and I have an existing mortgage with Nationwide, 2 year fixed, fix ending in August 2018. I’m lead to believe that getting a mortgage as a new contractor is quite challenging! From searching on here I can’t find any new contractors successfully getting mortgages so I’m a bit worried we won’t br able to remortgage come August.

    Furthermore, the contract position is only financed until August, it’s likely to be renewed but no guarantees.

    Finally, we want to move house, probably closer to this position since we have family around the area anyway, so we may need to get a new mortgage on a new house with a new contract in position...

    Does anyone have any advice on “day one” contractor mortgages please? I understand there’s a few brokers recommended through the forum but from reading the threads on these, most people have 12 months contract experience.

    TL;DR - currently perky but offer of contract job, need a new mortgage come August, is it going to be difficult and should I therefore turn down the job?
    Prior to the crash around 2008, it was fairly easy to get a mortgage via self declaration. Therin lay the problem. Since the crash there are more stringent rules and even as a permie it is tougher to get a mortgage. So, imagine how you look going for a mortgage as a new contractor ie no accounts never mind 3 years accounts to show them!

    Personally, I dont think you have a chance getting a mortgage as a new contractor but good luck.

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