Direct Mortgages in the era of Umbrellas

[crack_ho]

Anyone recently applied directly for a Mortgage in the new Umbrella era?

I'm looking at a product/rate that is not available via a broker but the criteria is a bit vague...

Where a sub-contractor works via an Umbrella Company receiving PAYE income, we will consider the longevity of the income stream.

[Lance]

Anyone recently applied directly for a Mortgage in the new Umbrella era?

I'm looking at a product/rate that is not available via a broker but the criteria is a bit vague...

Why tell them you're a contractor? They'll want to see 3 months of payslips and you'll appear as an employee (cos that's what you are) of the umbrella.
They will ask if you can foresee any reason why your income might change in the future, and you can be truthful and say no as you'd get another job if you finished this one.

[northernladuk]

We've had one post on here recently with someone struggling to get a normal mortgage via a brolly but I think the complication there was he hasn't been employed by them for the period they look back so it got complicated and lenders don't tend to do complicated when it comes to standard products.

I'd still recommend going through a broker. I've been using Freelancer Financials for many years for my BTL and home mortgages. Have a chat to John Yerou. He was saying when the PS hit that you could still get a mortgage based on your rate even if you were via an Umbrella. That's kinda good and not good. Good because the fact you are via brolly doesn't limit your borrowing levels but bad because I am sure there will be an issue with affordability if the mortgage is based on a rate you loose 50% of. I also believe times have changed so this may not be the case.
You'd think with so many people going brolly a couple of the lenders have wised up to it and have a better process.

Anyway, give Freelancer Financials a call and see what they have to say.

[crack_ho]

Why tell them you're a contractor?

The decision in principal did not require it, but the full application asks whether you are on a fixed term contract.
The umbrella payslip shows the day rate and calculation which I expect would reveal the truth.

I'd still recommend going through a broker

Will cost ~£45K more in interest.

[northernladuk]

Will cost ~£45K more in interest.

Will it? Every deal I can think of they've got me on my home has been less or equivalent to the normal products that weren't available to me anyway so it's actually cost me less.

OP can at least get the options on the table and then make a decision. Costs nothing to get the offer.

[eek]

Contractors are non standard applications - why would you not at least look at the specialist providers who know what is required to get a contractor a mortgage and find out from them exactly what rates they can get you.

And given current mortgage rates unless you are borrowing a £1m or so I really don't think the diference in interest payments will be that much, as surely you would be remortgaging when the existing mortgage runs out.

[Lance]

The decision in principal did not require it, but the full application asks whether you are on a fixed term contract.
The umbrella payslip shows the day rate and calculation which I expect would reveal the truth

An inside IR35 contract through a brolly is not an FTC.

[PerfectStorm]

Will it? Every deal I can think of they've got me on my home has been less or equivalent to the normal products that weren't available to me anyway so it's actually cost me less.

OP can at least get the options on the table and then make a decision. Costs nothing to get the offer.

Much claimed on here, but every whizz bang contractor specialist deal I've seen has always been beaten by going direct.

"Ah but we have exclusive rates" they'll say - and they're right. And their finders fees are exclusive too, which usually negate them if they haven't been beaten already by going direct.

[Fraidycat]

Basically contractors are considered to be 'sub prime' by most regular lenders

0.5% higher interest on a 500K loan is an extra £2500 per year, or £62500 over 25 years

[NowPermOutsideUK]

Much claimed on here, but every whizz bang contractor specialist deal I've seen has always been beaten by going direct.

"Ah but we have exclusive rates" they'll say - and they're right. And their finders fees are exclusive too, which usually negate them if they haven't been beaten already by going direct.

Simply not true - My primary residence is mortgaged with Halifax - 1.08% through a broker - going direct with halifax the rate was 1.29

With btl bmsolutions is the cheapest with 1.34% which can only be done with a broker

I looked at this in detail - the brokers seem to always do better than direct