Self certified / Self cert mortgages
ContractorMoney are sorry to announce that Self Cert mortgages are no longer available following a decision by the FSA (now FCA) to change the regulation of this once fail safe option for Contractors. Since the announcement in October 2009, all of the major Self Cert lenders have pulled their products off the market leaving many freelance workers fearing the worst.
However, we are pleased to say that all is not lost. We have access to specialist underwriting terms with many of the major mortgage lenders that allow us to secure a mortgage based on your contract rate alone.
Check out the FAQ below and make use of the 'mortgage finder' for tailored recommendations to fit your requirements
Q. What makes ContractorMoney so different from other mortgage advisers?
A. Like you, we are specialists in our field. Too many guys have horror stories to tell of using well-meaning but less contractor-focused, general financial advisers or worse still the poorly trained, de-motivated staff in the High Street branches and call centres of the big lenders. Every week we pick up the pieces for clients who have been given the run-around by less specialised brokers and unfortunately by this stage the pressure is really on to save your purchase. The majority of our clients are referred to us by other contractors who appreciate the fact that we have avoided the 'jack of all trades and master of none' approach to financial planning.
For further details of our regulatory status please read our Initial Disclosure Document.
Q. How much can I borrow?
A. ContractorMoney has negotiated specialist underwriting criteria for contractors with many 'High Street' lenders. You may not want to share this information with your partner but we should be able to secure a mortgage of up to 4 times your annualised contract rate. These terms are not available through the branch networks and we instead ensure that your application is processed by key personnel at the lenders centralised admin units who understand our requirements and who are sympathetic to your contractor status.
Q. Can I get a mortgage agreed in principle before I buy?
Yes, in many cases we can secure you an agreement, based purely on your contract rate alone (ie no question that the lender will backtrack once they see your accounts), within minutes. Armed with this information you will then be in an even stronger position to negotiate and we will happily verify with the seller/estate agent that you are 'good for the money'.
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 paid high deposits and uncompetitive interest rates with niche mortgage lenders, we have spent many years of patient negotiation to secure you the same low rates enjoyed by permies. Choose from discounts, fixed rates or the new generation of cheque book 'Offset' mortgages.
Q. Do I need a deposit?
A. Lenders are demanding higher deposits at the moment but this is in no means a reflection on your Contractor status. It is still possible to secure a mortgage with a 10% deposit but increasingly lenders are favouring homeowners with a 20-25% deposit which will allow you to secure the most competitive rates.
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. Most lenders will require 6 weeks left to run on your contract although we can often have room for negotiation on this and often we will be able to convince your agency to help 'talk up' your prospects of a renewal/fresh contract for mortgage purposes.
Q. What are the charges?
A. With a self-cert mortgage you will pay the usual valuation fee, legal fees to your solicitor and may pay an arrangement fee to the lender depending on the type of scheme you go for.
Q. How long does the mortgage process take?
A. Depending on which lender we eventually agree is best for your circumstances we can have approval of your loan within minutes. Once the survey has been done and the necessary legal searches performed by your solicitor the whole house buying process generally takes 3-6 weeks.
Q. What is a mortgage indemnity and will I have to pay it?
A. Indemnity premiums are a hefty fee that many lenders will charge you if you're unable to put down a large enough deposit. This protects them (not you) against your defaulting on the loan and leaving them a debt higher than the value of the house. ContractorMoney will always attempt to avoid lenders that charge this costly fee.
Q Will I have to accept costly loyalty clauses to secure a mortgage?
A. We pride ourselves on always securing you competitive interest rates whilst avoiding schemes that feature stings in the tail. 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 that are charged if you attempt to break free. 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 allow that freedom as soon as your current rate expires - allowing you to move on to the next good rate as soon as this one ends.
Q. What will happen to my mortgage rate after the initial scheme expires.
A. Too many people allow inertia to set in once an initially competitive interest rate expires. We will be in touch 2 months before the expiry of any special rate that you may be on so that we can explore the options available if you. We will look at what is on offer from the current lender and compare this with what is available elsewhere in the market. If appropriate we can often arrange a new lender to pay all fees to move your loan across to their schemes. In this way Contractormoney will be on hand to keep an eye on future market conditions and will help to ensure that you secure a 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. We will avoid schemes that insist on you taking out uncompetitive home insurance etc. We also avoid lenders that insist that you must take out life cover although as IFAs we would always recommend that your debt is properly protected and will be happy to provide no obligation advice on this subject.
Q. What next?
A. Simply complete a'mortgage finder' and one of our qualified mortgage advisers will quickly be in back in touch by email with some recommendations to exactly fit your mortgage requirements.