Welcome to Self Employed Mortgages for IT Contractors. We’re the perfect partner to secure you the best mortgage based on your contractor status.
What we do
In a world of large financial institutions and multi-chain mortgage brokers, we’re a bit different. As a specialist, independent mortgage brokerage, we only deal with contractors. Furthermore, the majority of our clients are indeed IT consultants.
What we’re about
Most mortgage brokers look and act the same, but we’re happy to be specialists in our field. We can arrange a competitive mortgage from a High Street lender based on your contract rate alone.
The fact that many of you earn substantially more than your permanently employed counterparts makes a huge difference when applying for a mortgage.
True, on paper, you do the same job as the ‘permies’. However, you face bias from High Street lenders who prefer lending to PAYE employees rather than take a ‘risk’ on contractors.
If you’ve faced that prejudice, you’re certainly not alone. Contractors from all trades hit a brick wall when applying for a mortgage. The truth is that the majority of lenders simply don’t “get it” when it comes to contractors.
It’s (probably) your payment structure stopping you get that mortgage
Do any of these scenarios sound familiar:
- you have insufficient trading history as an IT Contractor;
- you’ve just started contracting and therefore have no accounts;
- you’re unable to provide 2-3 years audited accounts;
- the taxable element of your earnings does not reflect your potential borrowing;
- you draw a minimum salary and restrict dividends to avoid higher rate tax;
- you’ve been declined a mortgage in the past due to your contractor status?
They should. The majority of IT Contractors operate in a tax-efficient way. Through their limited company, they draw ‘optimal’ salary and low dividends, thus don’t qualify for the higher rate tax.
That strategy makes for great tax planning under normal circumstances. But that low salary is a deterrent to most mortgage advisors. If you’re frustrated at your accountant for working this way, don’t fire them just yet!
So, yes. The downside of intelligent tax planning is that it has the unintended effect of reducing your potential borrowing. But only if you show it to a potential lender who doesn’t understand contracting. Here’s what you should be doing.
“Contract Based Underwriting” for IT Contractors
We’ve worked tirelessly over the years to negotiate bespoke underwriting with a number of mainstream lenders and building societies.
This allows us to package and submit your mortgage application directly to senior underwriters and key decision makers within lending institutions.
By bypassing branch and call centre staff, we ensure that your application is processed efficiently, correctly and without the usual hassle.
We have secured preferential terms for IT Contractors*
n.b. — *any or all of the below lending criteria may change without notice as we come out of lockdown. To get a precise mortgage quote, call us with your enquiry on 0208 421 7994 or Request a Callback.
All we’d usually need to package your application to underwriters is the following documentation:
- a copy of your current contract with assignment schedule confirming your daily/hourly rate
- a copy of your latest C.V.
- 3 months bank statements confirming your earnings (for loans greater than £500K).
- proof of ID.
We need NO Accounts, Salary Slips, P60’s, SA302’s or Income Tax Returns. Instead, our lenders calculate your potential borrowing using your current contract rate, ‘annualised’ to an earnings total.
Through our extended network of lenders, it is that easy.
How much can I borrow?*
To work out your potential upper borrowing limit, simply multiply your daily contract rate by the number of days worked each week (5 is good) x 48 weeks.
Finally, multiply this total by 4½ to calculate how much you could potentially borrow.
Typically, for a contractor earning £450 per day, annual earnings equate to £108,000 (£450 x 5 x 48). This dictates that they could borrow up to £486,000 to buy or remortgage a property.
Before attempting to apply for a mortgage directly, we strongly recommend that you speak with a mortgage specialist first. And for good reason.
Multiple credit searches leave foot prints on your credit history. Too many searches can adversely affect your credit score. And, yes: both credit history and score will play a part in your application assessment.
Speak to one of our specialists mortgage advisors today on 0208 421 7994 to avoid any unexpected surprises further down the line!
Or if you’d prefer, just take half a minute to complete our Mortgages Enquiry Form. One of our friendly advisors will contact you either way to discuss the best IT contractor mortgages available for your circumstances.
