Contractor Mortgage FAQs
Having teamed up with CMME, our favourite contractor mortgage specialists and provider of invaluable industry insight and helpful advice, we thought it would be a good idea to put a few of our most frequently asked questions to their team of experienced advisers.
Q. What makes CMME so different from other mortgage advisers?
A. CMME are specialists in our field. This allows us to excel when it comes to getting great deals for independent professionals. If you go with a general financial adviser or mortgage provider, you’re likely to be talking to someone that doesn’t fully understand your work situation, maintains unhelpful and outdated preconceptions of what it means to be a contractor, and isn’t sufficiently motivated to get you the best possible deal. If you end up with a lender like this, you’re unlikely to be satisfied. We’ve avoided this ‘jack of all trades and master of none’ attitude by being the best in the business when it comes to contractor mortgages and financial advice, offering a highly-specialised service and incomparable industry expertise.
Q. How much can I borrow?
A. How much you can borrow depends on your particular circumstances; these include the size of your income, how much of a deposit you can pay, whether you have dependents or other financial commitments and your credit rating. CMME works with both traditional ‘high street’ lenders and independent mortgage providers. However, we are able to bypass the ‘front of house’ staff and deal directly with the central admin departments. This allows us to get a better deal for you by making available terms and offers that are otherwise inaccessible.
Q. Can I get a mortgage agreed in principle before I buy?
A. Yes, CMME is able to secure an agreement in principle based on your contract rate alone, quite often within a matter of minutes rather than hours. This is a guarantee that’s not dependent on the provision of account information or financial records, so there’s no possibility of the lender backing out at the last moment. Armed with this information, you’ll find yourself in a much stronger negotiating position. CMME will also happily verify with the seller or estate agent that you are a financially viable buyer.
Q. Will I have to pay higher interest rates because I am a contractor?
A. Not at all. Whereas in the past those working on short-term contracts would have often been looked on as 'non-status' borrowers and would have to pay high deposits and uncompetitive interest rates with niche mortgage lenders, we have spent years patiently negotiating a fairer deal for independent professionals.
Q. Do I need a deposit?
A. Yes. Currently, lenders are demanding higher deposits and favour homeowners who are able to pay a 15-25% deposit. However, this isn’t a reflection on your status as a contractor. Instead, it’s an industry wide trend. It is still possible to secure a mortgage with a 10% deposit, but it’s likely to be at a less competitive rate.
Q. How long do I need to have been contracting?
A. We have the ability to arrange a mortgage within a week of you starting your first contract.
Q. How long do I need to have remaining on my contract?
A. In most cases, lenders will require 6 weeks left to run on your current contract. However, there is room for negotiation and it is possible to have your current employer help 'talk up' your prospects of a renewal/fresh contract for mortgage purposes.
Q. How long does the mortgage process take?
A. This depends largely on the lender, but it is possible to have your loan approved in principle within minutes. We often work on the premise that the entire purchase process will take somewhere between 3-6 weeks, so we know how important it is to get a quick response from a lender.
Q. What supporting documentation will I need to provide?
A. We would ordinarily just need a copy of your contract, CV, bank statements and ID.
Q. Will I need accounts?
A. Not if they are unavailable for some reason. Unlike less specialist advisers we fully understand that you may not have three years worth of accounts. Itcan be far better to work from your contract rate alone and CMME are in the unique position of being able to do that.
Q. What costs will I need to cover?
A. There may be an arrangement fee in order to book a particular interest rate.
Q Will I have to accept costly loyalty clauses to secure a mortgage?
A. CMME pride themselves on always securing competitive interest rates whilst avoiding schemes that don’t provide you with an open and honest account of the full costs. Too many contractors have been tempted by lenders offering a low headline-grabbing rate only to find that they suffer long periods at higher rates, with penalties and additional charges if you attempt to end the incentive period early. We can recommend a competitive selection of schemes that will allow you complete freedom to move your borrowing at any time or, at the very least, grant you that freedom as soon as your current rate expires.
Q. What will happen to my mortgage rate after the initial scheme expires.
A. CMME will be in touch two months before the expiry of any special rate that you’re benefiting from to discuss your options. Comparing what is on offer from the current lender with what is available elsewhere in the market, CMME will strive to ensure that you secure competitive interest rates throughout the life of your mortgage.
Q. Will I need to take out compulsory insurances with my mortgage?
A. We will always try and ensure that there are no hidden shocks when we make a mortgage recommendation to you. CMME avoid schemes that insist on the customer taking out uncompetitive home insurance or life cover. However, in our role as independent financial adviser, we would always recommend that your debt is properly protected and are happy to provide no-obligation advice regarding the issue.
Q. I want to move but can't or don't want to sell my current home.
A. By reversing the buy to let concept, CMME can arrange a loan on your current property to finance the purchase of a new home. 'Let to buy' is an ideal solution if you're unable or don’t want to sell your current house but are looking to purchase a new property.
Q. I have an existing rental property. Can I release some of the profit made from my house?
A. CMME can arrange a remortgage that allows you to switch to an alternative scheme and release some of the equity in your rental property at the same time.
Q. I have had a CCJ. Will this stop me from getting a mortgage?
A. It doesn’t have to. We have access to a range of 'impaired credit' schemes to get you back on track and allow you to buy a property/move up the property ladder.
Q. What next?
A. Simply call the CMME team directly on 01489 555 080 or visit their website at www.cmmemortgages.com for more information.
ContractorUK are not authorised to offer regulated mortgage advice. ContractorUK are introducers to CMME.
Your home may be repossessed if you do not keep up repayments on your mortgage.
CMME is a trading name of CMME Mortgages and Protection Limited. Authorised and regulated by the Financial Conduct Authority (FCA reg. 414798). Registered in England No. 04886692. Registered Office: Albany House, 5 Omega Park, Alton, Hampshire, GU34 2QE. Please be aware that Commercial Mortgages, Overseas Mortgages and some Buy To Let Mortgages are not regulated by the Financial Conduct Authority. Calls may be recorded for training and security purposes and to improve the quality of our services.