So much going for and against me - mortgage advice needed

[CalamityJane]

Haven't posted in a LONG time. Yes, I've spared you.

But I'm now in a really good and bad position for getting a mortgage and I wanted to get the lay of the land from you guys.

Please tell me your personal experience of trying to get a mortgage as a contractor. I want to be armed before I speak to a mortgage advisor as they actually aren't allowed to give much advice these days.

The Good News:

• I have a £180K deposit which I would hope to get up to £200K by the time I actually find a property I want to buy. The props I like tend to be circa £400K - £450K but the market is so stagnant that I expect to get 10% off the asking price.
• My contract pays £450 p/d (a pittance to some of you but decent for me) but just begun last month and ends at the end of March. Usually the clients are big recognisable brands and this time is no exception.
• I own a property which I plan to make into a rental to give me extra income circa £800-1000 p/m - half of which I'll need to put aside for taxes/repairs. (Prop is worth £400,000 but I have £100K mortgage on it - at a low, fixed rate. In the eight years I've owned the property I've not missed a payment)

The Bad News:

The bad news is very very bad - and means that it is hard for an underwriter to think favourably of me in terms of annual income OR consistency of work...
I am somewhat of a dilettante... I work crazy hours when I am in contract - but half the time I am NOT in contract!
By choice I work for six months, then once the contract is complete I take 4-6 months off to make a film or partner with a brand on some fun project that earns nothing (or next to nothing) or I study an interesting hobby...

Never have problems getting contracts with big brands because my time off is so interesting to them and it's clear I'm very busy doing stuff BUT I am confident that an Underwriter would be fairly disgusted.

Plus, i started a new contract last month after six months off..!

But then i do own a property already that might reassure them that there will be a steady income from it.

If you HAD to pick a side and say whether things were swinging for or against me......what would you say?

And what would you advise?

(Please don't tell me to go work for 22 months straight on the same contract - I am not made that way. I've been doing this for 10 years now and I know my limits. I take six month contracts and do them well enough that I am always asked to stay on or to come back (I always say no) and I treat the clients like gold and go the extra mile always - but that is ALL I can manage...

And yes, I am looking into other business opportunities as I am better suited to running an online product-based business. I enjoy the work but I hate the politics of office life - but that's another story for another day.

Mortgage doom or Mortgage hope?

[GhostofTarbera]

Just go to an understanding underwriter (where there are many who understand contractors) - problem solved

Any other life problems you want solved while you are here ?


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[ladymuck]

There's been a few discussions on the boards recently about mortgages.

Many lenders (CMME did allude to this, here) don't require longevity of contract.

You have a good deposit so I suggest you get a broker (Freelance Financials / CMME) or talk to friendly banks (Barclays / Halifax) to get a better view.

I think you're worrying about nothing. I thought the "bad" was going to be that you have CCJ's or bankruptcy on your credit record!

[wattaj]

There's been a few discussions on the boards recently about mortgages.

Many lenders (CMME did allude to this, here) don't require longevity of contract.

You have a good deposit so I suggest you get a broker (Freelance Financials / CMME) or talk to friendly banks (Barclays / Halifax) to get a better view.

I think you're worrying about nothing. I thought the "bad" was going to be that you have CCJ's or bankruptcy on your credit record!

^^ This.

I see no problems here. Talk to CMME/Freelance Financials. I doubt that the banks will necessarily *get it*, but the brokers will. You have nothing to fear.

[northernladuk]

Tl;dr

Just go to a broker as mentioned above.

[CalamityJane]

^^ This.

I see no problems here. Talk to CMME/Freelance Financials. I doubt that the banks will necessarily *get it*, but the brokers will. You have nothing to fear.

Thank you - I will go to a broker. I was thinking that I'd go straight to Halifax as I've heard good things but I guess I should play it safe an pay the middleman.

Thanks for the reassurance. My thoughts were that the criteria was frequency of work or annual amount made. Felt like I lost on both counts due to my six month absences so good to hear that there is hope here.

[Craig@Clarity]

I'd recommend going to an adviser that understands contractor mortgages and can help with the application. If you have an accountant, they should be associated to an IFA or similar who they can refer you to. Lenders will usually look at your affordability. Whatever business decision takes place in a limited company (6 months on/off) shouldn't have any bearing. They should look at the company's profits and reserves and your personal income for however many tax years they want to go back (maybe 2 or 3 years) to satisfy themselves you're good. This is then backed up by a request to your accountant to provide a reference to support your affordability.

[highlandspring]

Mortgage

I think it will all be in the rate. If you had a more solid work pattern you could get a better rate.

[Hobosapien]

You could look into releasing the £300k or so equity in your current property for purchasing a new one. You may need to convert the existing mortgage to a BTL one anyway to be properly above board, so can re-arrange assets and finance so you have a new property without a mortgage and one with a BTL mortgage that you pay off with the rental profit.

Not sure if the contract specialist mortgage providers also cover BTL, where you only need a contract with 3 months+ to run to be able to use the contract rate as basis for loan potential.

In theory you could get a BTL mortgage with no current income (i.e. between contracts) if they base the affordability on the rent projection. Anyone done this?

[ChimpMaster]

Sounds like you have an amazing life!

PM me and I'll give you my direct contact at Freelancer Financials - he's an awesome broker and has arranged at least a dozen mortgages for me over the years.