As a daily rate contractor whether in IT or a different industry it is standard practice to set up a Ltd Company and be paid via that Ltd company. There are many reasons to do this, such as tax efficiency. The flip side to this is that many mortgage brokers, banks and building societies do not fully understand this, which can lead to difficulties in obtaining a mortgage.
A problem you may encounter is that whoever you speak with is likely to simply ask ‘are you self-employed?’ and then request figures for your company’s last 3 years salaries and dividends, which is standard protocol for self-employed clients. Realistically this will not provide a true reflection of your income and will likely result in not being able to obtain a large enough mortgage.
Hawk Mortgages are a specialist in arranging mortgages for IT and other daily rate contractors. With our experience we know how to present a case to the respective lenders in order to ensure your requirements are met obtaining more favourable borrowing amounts.
Self-Employed Daily Rate Contractors
As a self-employed daily rate contractor, you simply need 12 months+ history of working on this basis.
Lenders have varying way of calculating your income, it may be as an annualised percentage of your daily rate e.g. £500 per day x 5 days x 52 weeks = £130,00 @ 80% of this equates to a paye income of £104,000.
Or day rate of e.g. £500 pd x 5 days x 48 weeks = £130,000.
Rest assured Hawk Mortgages know the correct lenders to place daily rate contractors with and we know the varying calculations to provide you with effective and robust advice.
Just left employment and set up as a self-employed contractor? No problem
Even with no accounts or no contracting experience providing you have 2 years continuous work in the same line of work we may be able to arrange a mortgage for you.
For example: A client has been working on a paye permanent contract as a software engineer for the last 2 years. The client has just set up a ltd company and left employment to work as a day rate contractor through a Ltd Company. Even on day 1 of the new contract we may be able to facilitate a mortgage for this client due to the continuous history of working in the same industry.
Whilst most lenders and brokers wouldn’t be able to provide a mortgage to someone who has no accounts or history working as a contractor, as a specialist broker for contractors we have the right links with the correct mortgage lenders as well as the knowledge and experience to facilitate this.
Do you need help? Fill out this form to get in touch.