3 contracting mortgaging myths

The words ‘self-employed’ and ‘mortgage’ tend to elicit negative comments from people, who, quite frankly, don’t have a scooby what they’re talking about! In this blog, we dispel three common myths around getting a mortgage as a contractor. 

1. Contractors are less likely to be approved for a mortgage than full-time employees

 This is false. Your mortgage provider will run an affordability assessment the same way they would for a ‘full-time’ worker. You won’t be charged a higher interest rate than your friends/family in permanent roles either. Plus, if you work under an umbrella company, then you are deemed a full-time employee by HMRC anyway.

2. Contractors are required to put down a larger deposit 

Wrong! In the UK the lowest mortgage deposit you need is 5% and contractors are no exception to this rule. However, it is worth noting that the higher the mortgage deposit you can afford, the more choice of lenders you will have at your disposal. Furthermore, you more you put down, the lower your interest rate will be too (in most cases). 

3. You need to be an experienced contractor to even get a look-in from lenders 

Guess what? This is also a myth! Whether you’ve been contracting since the last time we had a labour government, or are just about to start your first assignment, it won’t make a difference to your application. However, lenders will be keen to look over your income history so as long as there is consistency you will be fine. Each lending criteria is different so we recommend getting in touch with a specialist contractor broker before deciding on the next steps.

We hope you found this blog helpful. Don’t hesitate to get in touch with Mint via email at [email protected] should you need further support.