I've been contracting for less than 12 months, can I get a mortgage?
Most contractor friendly lenders look for at least 12 months track record of contract work to give them confidence in the borrower. Lenders will also want to see evidence of a contract renewal, or a new agreement with another employer within this time frame. If a client is coming to the end of their existing contract, a lender is likely to look for information about the contractor’s intentions as well. However, some lenders will consider those new to contracting with less than 12 months contract work if the applicant has a previous background as a PAYE employee in the same industry.
The following is a fictitious example and for illustrative purposes only of the type of borrow profile a contractor friendly lender could help.
Steve, 36, is a Java developer who was employed by an investment bank for 4 years and opted to take voluntary redundancy when the bank relocated. Very soon after leaving he found work with a competitor in Canary Wharf on a 6 month contract earning £550 per day. He was tasked with designing systems to sit on the banks central risk calculations platform. Steve is now looking to buy a 3 bedroom house for a family home with his wife and two young children. He is struggling to find a mortgage as he has been working as a contractor for less than 12 months.
Some contractor friendly lenders will consider contractors who have been contracting for less than 12 months if they have moved from a full time salaried role within the same sector. In this example, the lender would look at Steve's previous employment track record as well as his current contract when making a decision.
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If you're a contractor trying to get a mortgage who has switched from full time employment to contracting in a similar role in the previous 12 months, help could be at hand.
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