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achillea
19th February 2011, 08:43
Hi

My partner and I are currently renting and looking to buy. I'm wondering in the current climate whether its worth me paying for a specialist contractor mortgage broker or just go down the usual route. I finished a 19 month contract (£600pd) in December and currently on a break (thinking of picking up next contract April time but really not in any hurry to get back on the treadmill). I sold my flat last year and have £200k for a deposit. I have about £90k in the company war chest. I only draw about £11k in salary per year and pay myself about £45k in dividends.

My partner has a normal permie job earning £33k gross.

Only looking to take out a mortgage of about £250k (which seems whopping to me but may consider a bit higher if I can get it) over say 15-20 years.

What do people think of my chances of getting a mortgage following the normal route or should I play it safe and go with an outfit such as Contractor Mortgages and pay the subsequent fee?

Also, is it best to wait until I'm in my next contract before applying despite the above? This is my main concern.

Many thanks in advance
L

ChimpMaster
19th February 2011, 09:10
CM don't charge a fee as far as I am aware. They're paid by the mortgage provider that you choose to go with.

On £33k your wife will be able to get a mortage on her own right (£25k minimum is needed) but of course she won't be able to get £250k.

I recently went through a mortgage exercise with CM and an independent broker, and both provided a good service. The advantage of CM is that they have relationships with the mortgage providers so that they don't have to explain what a contractor is and how you get paid etc. This is a big advantage. They also do all the groundwork for you, to get you the offer.

One thing I'm not sure of is whether you need to be in contract to get a mortgage. I think that it would certainly help, though often the mortgage provider may well just want to see your last 1 or 2 year's annual accounts and perhaps write to your accountant.

Durbs
19th February 2011, 09:27
When we got our last mortgage, our normal high street bank knew what a contractor was so whilst "Computer says no", actual person I was sat talking to looked at my Co accounts and then said yes.



Also, is it best to wait until I'm in my next contract before applying despite the above? This is my main concern.


Depends on how long you've been on the bench, I had to provide last 12 months company bank statements so if you've been benched you're effectively a small business with no demonstrable income over the past x months so you do have a problem in that case.

Fred Bloggs
19th February 2011, 14:30
CM don't charge a fee as far as I am aware. They're paid by the mortgage provider that you choose to go with.

On £33k your wife will be able to get a mortage on her own right (£25k minimum is needed) but of course she won't be able to get £250k.

I recently went through a mortgage exercise with CM and an independent broker, and both provided a good service. The advantage of CM is that they have relationships with the mortgage providers so that they don't have to explain what a contractor is and how you get paid etc. This is a big advantage. They also do all the groundwork for you, to get you the offer.

One thing I'm not sure of is whether you need to be in contract to get a mortgage. I think that it would certainly help, though often the mortgage provider may well just want to see your last 1 or 2 year's annual accounts and perhaps write to your accountant.That's a bit sexist, what if is a lady posting?

ChimpMaster
19th February 2011, 16:30
That's a bit sexist, what if is a lady posting?

Well he wrote:
"contract (£600pd) in December and currently on a break (thinking of picking up next contract April time but really not in any hurry to get back on the treadmill). I sold my flat last year and have £200k for a deposit. I have about £90k in the company war chest. I only draw about £11k in salary per year and pay myself about £45k in dividends."

But she would have written:
"contract (£600pd) in December and currently resting and letting OH take care of me (thinking of fancy holiday followed by extra loads of shopping and really not in any hurry to get back on the treadmill). I sold our flat last year and spent the money on shoes and one of those 'tease & denial' devices for OH. I have £2000 for a deposit. I have about £900 in the company war chest. I draw as much money as I can from the company to spend on special treats because I've been working so hard."

Doggy Styles
19th February 2011, 16:44
Well he wrote:
"contract (£600pd) in December and currently on a break (thinking of picking up next contract April time but really not in any hurry to get back on the treadmill). I sold my flat last year and have £200k for a deposit. I have about £90k in the company war chest. I only draw about £11k in salary per year and pay myself about £45k in dividends."

But she would have written:
"contract (£600pd) in December and currently resting and letting OH take care of me (thinking of fancy holiday followed by extra loads of shopping and really not in any hurry to get back on the treadmill). I sold our flat last year and spent the money on shoes and one of those 'tease & denial' devices for OH. I have £2000 for a deposit. I have about £900 in the company war chest. I draw as much money as I can from the company to spend on special treats because I've been working so hard.":laugh

Fred Bloggs
19th February 2011, 17:17
Well he wrote:
"contract (£600pd) in December and currently on a break (thinking of picking up next contract April time but really not in any hurry to get back on the treadmill). I sold my flat last year and have £200k for a deposit. I have about £90k in the company war chest. I only draw about £11k in salary per year and pay myself about £45k in dividends."

But she would have written:
"contract (£600pd) in December and currently resting and letting OH take care of me (thinking of fancy holiday followed by extra loads of shopping and really not in any hurry to get back on the treadmill). I sold our flat last year and spent the money on shoes and one of those 'tease & denial' devices for OH. I have £2000 for a deposit. I have about £900 in the company war chest. I draw as much money as I can from the company to spend on special treats because I've been working so hard."Yeah, likely.

PastaBlasta
19th February 2011, 23:24
I've never used a broker, always just applied to whoever gives the best offer at the time.

TBH, using a broker never crossed my mind.

Years ago it was a nightmare for contractors - you had to provide audited accounts and everything. Now the mortgage company will accept a letter from your accountant saying what your earnings (salary + dividend) have been for the last so many years.

I just wish I could borrow from my ltd company! Because now I'm in the silly position of getting turdy interest on my business account while paying pretty freaking high interest on my mortgages.

sbakoola
20th February 2011, 09:59
There is one 'mortgage broker' advertised on this website that I didn't have a great experience with. They were:

a) Rude wide boys.
b) Only asked for my "CV" with rates noted down during the contracts.
c) Gave me an awful deal (the worst possible fixed rate)
d) Demanded around £295 for their services (without informing me about it upfront) after I declined the awful rate on the mortgage deal from the lender.
e) I'm almost sure that the rate on the mortgage offer was not given to me until AFTER the house valuation survey which I thought to be extremely odd.


Never again with that broker mentioned above, I think I could have done a better job going to the high street lenders; but instead I got a more professional City based broker, who did it the proper way, i.e. asked for 2 years worth of unaudited (signed and endorsed by Accountant) + copy of other curreny contract, they worked hard to get me a good deal and they got me a deal 1.5% less than the other joker mortgage broker above who was a waste of time and money.

Go for a City broker in London, there are loads of people working in the City who are on contract and

EternalOptimist
20th February 2011, 10:33
save up , pay cash, save a wodge. you know it makes sense.

pain now, relax later - it the contractor way





:rolleyes:

Freamon
20th February 2011, 10:36
Well he wrote:
"contract (£600pd) in December and currently on a break (thinking of picking up next contract April time but really not in any hurry to get back on the treadmill). I sold my flat last year and have £200k for a deposit. I have about £90k in the company war chest. I only draw about £11k in salary per year and pay myself about £45k in dividends."

But she would have written:
"contract (£600pd) in December and currently resting and letting OH take care of me (thinking of fancy holiday followed by extra loads of shopping and really not in any hurry to get back on the treadmill). I sold our flat last year and spent the money on shoes and one of those 'tease & denial' devices for OH. I have £2000 for a deposit. I have about £900 in the company war chest. I draw as much money as I can from the company to spend on special treats because I've been working so hard."
FX: Polite ripple of applause from the MCC box.

achillea
20th February 2011, 11:51
Thanks for the sensible posts guys. Yes, I am indeed a woman and no, I'm not spending my hard earned dosh on shoes and handbags... !

Any thoughts on good 'city' brokers to use? Last time I applied for a mortgage it was with Northern Rock so I'm not used to going down the broker route.

Reckon I need to a) get another contract before applying b) apply before March next year when I have to file my current year's financial accounts which will be seriously down on the previous year

cheers
L

ChimpMaster
20th February 2011, 21:31
Thanks for the sensible posts guys. Yes, I am indeed a woman and no, I'm not spending my hard earned dosh on shoes and handbags... !

Any thoughts on good 'city' brokers to use? Last time I applied for a mortgage it was with Northern Rock so I'm not used to going down the broker route.

Reckon I need to a) get another contract before applying b) apply before March next year when I have to file my current year's financial accounts which will be seriously down on the previous year

cheers
L

Have PM'd you. But only cuz ur a woman :moon:

Paddy
21st February 2011, 03:50
Well he wrote:
"contract (£600pd) in December and currently on a break (thinking of picking up next contract April time but really not in any hurry to get back on the treadmill). I sold my flat last year and have £200k for a deposit. I have about £90k in the company war chest. I only draw about £11k in salary per year and pay myself about £45k in dividends."

But she would have written:
"contract (£600pd) in December and currently resting and letting OH take care of me (thinking of fancy holiday followed by extra loads of shopping and really not in any hurry to get back on the treadmill). I sold our flat last year and spent the money on shoes and one of those 'tease & denial' devices for OH. I have £2000 for a deposit. I have about £900 in the company war chest. I draw as much money as I can from the company to spend on special treats because I've been working so hard."

Post of the year so far :laugh

Lockhouse
21st February 2011, 08:22
I've never used a broker, always just applied to whoever gives the best offer at the time.

TBH, using a broker never crossed my mind.

Years ago it was a nightmare for contractors - you had to provide audited accounts and everything. Now the mortgage company will accept a letter from your accountant saying what your earnings (salary + dividend) have been for the last so many years.

I just wish I could borrow from my ltd company! Because now I'm in the silly position of getting turdy interest on my business account while paying pretty freaking high interest on my mortgages.

WHS - Just look for the best deal. I'm moving houses at the moment. HSBC are good at the mo if you have a 40%+ deposit.

What really sticks in my throat is the 4% moving tax.

EternalOptimist
21st February 2011, 08:47
Thanks for the sensible posts guys. Yes, I am indeed a woman and no, I'm not spending my hard earned dosh on shoes and handbags... !



Do you have something against heels, achillea ?




:rolleyes:

ChimpMaster
21st February 2011, 09:56
Post of the year so far :laugh

I doubt anyone will remember when it's time for the nominations in December :eyes

achillea
21st February 2011, 10:52
The days of 4" stilettos are for the most over... give me a pair of calf skin, low heel FMBs any day.