Is paying min dividends/salary going to create problems with mortgage applications ?

[TheMortgageSquad]

I spoke to Halifax directly, although on their website they say annual income is estimated based on the daily rate, the advisor told me they look at last 2 years self-assessment numbers instead

Herein lies the problem with going direct to lenders sometimes. Unfortunately its a flip of the coin as to what Advisor you speak to. Because the vast majority of clients most Advisors speak to on a daily basis fit into the neat full time permy employed, self employed sole trader or Limited Company director boxes, it confuses them when a day rate contractor comes along and says they contract through their own Limited Company. They hear 'Limited Company' and try and pigeonhole you into their Limited Company (self employed) criteria, asking for things like tax calculations and company accounts. This is where using a broker who specialises in contractor mortgages can really help as they have the knowledge, experience and contacts to ensure that your mortgage application is dealt with in the correct way and your income assessed as a multiple of your contract rate if needed.

Despite what some another poster has said, it is not just Halifax, Nationwide or Clydesdale Bank who can offer Contractor mortgages, there are a lot of other lenders who can, including Natwest, Skipton Building Society, Scottish Widows, Accord Mortgages, MPowered Mortgages, Kensington, Virgin Money and BM Solutions to name a few more. Each have their own spin on how they will view contractors and the documents they need for an application.

A good contractor mortgage broker should be looking at the best option for your own specific circumstances. Even if you contract outside IR35 through your own Limited Company there may actually still be options available to you using your company accounts and/or tax calculations (SA302's) as an alternative to a contractor mortgage which could open up other, more competitive options from non contractor friendly lenders. Just because you are a contractor, it does not always mean you have to find a contractor mortgage. The broker should be checking all avenues for you.