Halifax won't give mortgage due to IR35 and contract wording

[bodillc]

...or lack of ! My contract ( rolling 3 months ) does not state anywhere that I work 5 days a week on xxx site. It does state my rate and 8 hours a day. However, Halifax will not grant me a mortgage simply because my agency refuses to declare ( understandably - IR35 incrimination ) that I work 5 days a week at the same company. I am employed by my own Ltd business as a director and have been in buisness for over 12 years. The broker says this is standard practice and my agency refutes it all.

Anyone had such issues? How do you get past this ?

Hugely appreciated

[craig1]

I think you really need to sack your broker and go to another one who understands how the mortgage system works for self-employed people...

Contractor mortgages tend to be based on a starting position of published accounts of your one-man Ltd co. If you have years of relatively good contracting behind you and can back that up with annual accounts and tax records to show your total income (salary plus dividends) then you can get some pretty good rates even in these days of tighter mortgage control.

[Martin at NixonWilliams]

I agree with Craig, the high street banks have very little understanding of contractor businesses.

Seek advice from a mortgage advisor that specialises in contractors. We refer our clients on to CMME however there are many others out there.

I hope this helps.

Martin

[bodillc]

Thanks for the advice guys. Much appreciated. Very frustrating !

[bodillc]

Freelancerfinacials seem to understand contractors, however, the issue is coming from Halifax themselves. Its a pity my broker has chosen Halifax as its over 2 months that they have been trying to get this deal sorted ( waiting for my contract extension ! )

[kevpuk]

I am in the middle of a broker-based Halifax mortgage process right now, and had no trouble with my contract and work history - perhaps you need to quiz your broker on this, or use one who specialises in contractors?

There are a couple of bods on these boards from such firms.....that said, if Halifax application is not going smoothly, then that may not bode well in general - credit searches can tend to have a detrimental effect if a few start cropping up in a short time on your record.

Are you 100% that the contract wording is the issue, or is there any chance that other things are impacting the decision? I wouldn't have thought that mortgage application bods are experts on IR35, nor am I convinced that it is the issue here....

[TheFaQQer]

My contract doesn't say what days I work, and I managed to get an agreement in principle last year with the Halifax via Freelancer Financials.

Ask the broker what more they can do, and if they aren't specialists, I'd find one who is.

[kingcook]

...or lack of ! My contract ( rolling 3 months ) does not state anywhere that I work 5 days a week on xxx site. It does state my rate and 8 hours a day. However, Halifax will not grant me a mortgage simply because my agency refuses to declare ( understandably - IR35 incrimination ) that I work 5 days a week at the same company. I am employed by my own Ltd business as a director and have been in buisness for over 12 years. The broker says this is standard practice and my agency refutes it all.

Anyone had such issues? How do you get past this ?

Hugely appreciated

Tell them that you run your own company that has been in business for over 12 years. Show them your accounts for the past 3+ years.

[bodillc]

Thanks for the replies guys.

Wish it was that simple ! I'm surprised Freelancer Financials are battling so much with their Halifax rep / broker / underwriter or whoever he is. Making my application an absolute missery. I could be earning £1000 per day and still wouldn't please him just because there is no mention of " working 5 days per week" ! After all, who is their right mind would not work every day of a contract unless for good reason. Its the whole ethic of why we work as contractors ! I find this issue rediculous and laughable and wish this rep from Halifax would get real. " 8 hours a day " should suffice as ample proof., never mind all my books and contract extensions etc etc.

[TheCyclingProgrammer]

Positive recommendation for Ben @ Power Mortgages from me who has been a huge amount of help to me over recent months (we now have a mortgage DIP).

You can get mortgages approved based on your contract and day rate, but lenders are normally looking for a solid contract of a decent length to lend on this basis. However, if you've been in business for a while and have years worth of accounts, there's not normally any need to go down this route...there are lenders who will lend to you based on a combination of salary + dividends *or* company net profit before tax + directors salary. This can be your most recent year or an average of the last few years and they'll typically want your accounts and a letter from your accountant as evidence.