Top tips for finding a contractor mortgage


Buying a property is taking much longer than usual thanks to Covid-19. The end of lockdown sparked a mini housing boom, created by a rush in buyers wanting more space both inside and out. Buyers are also keen to take advantage of the stamp duty holiday before it runs out at the end of March, meaning agents, lenders, brokers, surveyors and solicitors are all inundated with enquiries and business. Meanwhile, lenders still have many staff working from home, resulting in it taking longer to get everything done.

Indeed, some sources claim that if you want to take advantage of the stamp duty holiday you must begin the buying and selling process by 1 November.

Day-rate contractors looking for a mortgage face the same delays and issues as other borrowers – perhaps more so, as they have fewer options when it comes to getting a mortgage. Most high-street lenders do not offer contractor mortgages, where they take your day rate into account when deciding how much you can afford to borrow.

AWS Financial Services has some top tips for contractors to make themselves more appealing to lenders:

Get organised

Check your credit rating to make sure there are no mistakes, obtain proof of ID, a copy of your contract and bank statements. Contractors need to supply more paperwork than your average buyer so make sure you have everything the lender will need. Check you are on the electoral roll. If you are selling a property before buying, get your home on the market asap.

Pull together as big a deposit as possible

Higher loan-to-value mortgages are harder to come by with lenders more cautious about the economy and house prices as a result of the pandemic. A 10 per cent deposit may not be enough to get the mortgage you want, so if you have savings which aren’t earning much interest, or can ask family members for help, this will widen your mortgage options.

Consult a whole-of-market broker, such as AWS Financial Services

This should be your first step before making any mortgage application because most high-street lenders don’t offer contractor mortgages. We arrange many mortgages for day-rate contractors so know which specialist lenders to approach and how to present your financial situation to ensure you get the best possible mortgage.

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