Mortgage - specialist contractor broker vs standard lender route? Mortgage - specialist contractor broker vs standard lender route?
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  1. #1

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    Default Mortgage - specialist contractor broker vs standard lender route?

    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

  2. #2

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    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.

  3. #3

    Contractor Among Contractors

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    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.

    Quote Originally Posted by achillea View Post
    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.
    Last edited by Durbs; 19th February 2011 at 09:32.

  4. #4

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    Quote Originally Posted by ChimpMaster View Post
    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?

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    Quote Originally Posted by Fred Bloggs View Post
    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."

  6. #6

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    Doggy Styles is a permanent contractor


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    Quote Originally Posted by ChimpMaster View Post
    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."

  7. #7

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    Quote Originally Posted by ChimpMaster View Post
    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.

  8. #8

    Nervous Newbie

    PastaBlasta has no reputation


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    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.

  9. #9

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    sbakoola has more data than eek


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    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
    Last edited by sbakoola; 20th February 2011 at 10:09.

  10. #10

    The beerded one

    EternalOptimist is NOT a disguised employee

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    save up , pay cash, save a wodge. you know it makes sense.

    pain now, relax later - it the contractor way





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