MMR - Getting a mortgage whilst on the bench?

[Power Mortgages Ltd]

Did the bank also want proof you were currently in contract, or just proof you had been doing well the 3 previous years?

Hi d000hg, you should be fine with just the 3 years accounts, probably only actually need 2 years anyway. A lot of lenders work off 2 years rather than 3 years.

[d000hg]

Hi d000hg,

I think you're confusing two different ways of assessing income; if a lender is assessing on the basis of a contract rate, they will not look at income through the LtdCo at all. If they're looking at your LtdCo income by way of accounts and/or SA302's, a contract is irrelevant as they're assessing you as a self-employed company director.

Hope that helps.

Thanks

Mark

No, not confusing - asking. I was asked for all these different things: accounts, SA302, copies of contract-schedules, but that was because different lenders were looking at different combinations. I'm fairly certain my provider wanted at least two of those (The Coventry).

So ultimately, being benched wouldn't affect some mortgages/lenders one jot because they only look at your past accounts not your current situation. Which is good to know.

[Mark McBurney@CMME]

No, not confusing - asking. I was asked for all these different things: accounts, SA302, copies of contract-schedules, but that was because different lenders were looking at different combinations. I'm fairly certain my provider wanted at least two of those (The Coventry).

So ultimately, being benched wouldn't affect some mortgages/lenders one jot because they only look at your past accounts not your current situation. Which is good to know.

Coventry will be assessing accounts/SA302's so won't need the contract (they have no real contractor criteria). No lenders will look at both accounts and contract.

In fairness if you can get the mortgage that you need based on accounts or SA302's rather than contract value, you will probably find a better combination of rate and/or processing speed in a fair chunk of scenarios.

[d000hg]

Ta

[rocktronAMP]

Coventry will be assessing accounts/SA302's so won't need the contract (they have no real contractor criteria). No lenders will look at both accounts and contract.

In fairness if you can get the mortgage that you need based on accounts or SA302's rather than contract value, you will probably find a better combination of rate and/or processing speed in a fair chunk of scenarios.

How long does it take for a contractor to actually get a mortgage in 2014?

Assuming, I won a contract [ and I still interviewing now and looking], what are the steps and the time periods inside an application? (What has changed since the early noughties? ;-)

When do you get the mortgage in principle bit?


TIA

[rocktronAMP]

I am so sorry to bore with this mortgage thread again. I am still "looking", interviewing hard and on the bench until I cross the finishing line.

Recently, I was advised by a mortgage broker that I would need a continuous phase of "employment" or "earning an income" of at least 12 months in order to apply for a contractor mortgage. It does not matter if I was using an umbrella or a limited company, the mortgage provider would need to see that I had a continuous stream of income to prove that I could pay the bills. It also does not matter if tomorrow I won a 3,6 or a 12 month contract. In my situation, I have been almost 2 months on the bench, are my chances completely gone? Is there no chance to get a mortgage at all?

I almost there with winning a next contract according to one agent, I just want to know where I stand. Has anyone else on the forum gone through or is going through a similar circumstance?

PS: I suppose there are IT contractors with super skills out there, who are going from contract to the next with no issues at all in the space of couple of weeks. Sadly, this has not been the case for me in the last couple of years. The competition is fierce inside greater London, it takes me from 2.5 weeks to 3 months to find the next contract.

[Mark McBurney@CMME]

I am so sorry to bore with this mortgage thread again. I am still "looking", interviewing hard and on the bench until I cross the finishing line.

Recently, I was advised by a mortgage broker that I would need a continuous phase of "employment" or "earning an income" of at least 12 months in order to apply for a contractor mortgage. It does not matter if I was using an umbrella or a limited company, the mortgage provider would need to see that I had a continuous stream of income to prove that I could pay the bills. It also does not matter if tomorrow I won a 3,6 or a 12 month contract. In my situation, I have been almost 2 months on the bench, are my chances completely gone? Is there no chance to get a mortgage at all?

I almost there with winning a next contract according to one agent, I just want to know where I stand. Has anyone else on the forum gone through or is going through a similar circumstance?

PS: I suppose there are IT contractors with super skills out there, who are going from contract to the next with no issues at all in the space of couple of weeks. Sadly, this has not been the case for me in the last couple of years. The competition is fierce inside greater London, it takes me from 2.5 weeks to 3 months to find the next contract.

Every case is different - a two-month gap may not be 'terminal' depending on the rest of the case.

EDIT: Sorry, I missed your previous question from around a month ago!! A mortgage in principle can be obtained at an early stage if need be. For the application process, you're looking at around 4-6 weeks from application to issue of a mortgage offer, depending on lender.

[SueEllen]

Recently, I was advised by a mortgage broker that I would need a continuous phase of "employment" or "earning an income" of at least 12 months in order to apply for a contractor mortgage. It does not matter if I was using an umbrella or a limited company, the mortgage provider would need to see that I had a continuous stream of income to prove that I could pay the bills. It also does not matter if tomorrow I won a 3,6 or a 12 month contract. In my situation, I have been almost 2 months on the bench, are my chances completely gone? Is there no chance to get a mortgage at all?

Every mortgage advisor says different things.

I was told I couldn't re-mortgage by one and ignored by another, so I did some research online, found a couple of banks who deal with contractors, found the lowest interest rate and went in with my accounts, made an appointment for 30 minutes later and walked out with signed paperwork.

Just concentrate on getting your next contract. They tend to arise when you least expect them....

[Mark McBurney@CMME]

Every mortgage advisor says different things.

I was told I couldn't re-mortgage by one and ignored by another, so I did some research online, found a couple of banks who deal with contractors, found the lowest interest rate and went in with my accounts, made an appointment for 30 minutes later and walked out with signed paperwork.

Just concentrate on getting your next contract. They tend to arise when you least expect them....

This is sort of similar to a situation I experience fairly frequently, I'll try and explain...

A client, let's call him Mr Smith, calls me and explains how he's been given the details of a Halifax mortgage by Broker X, and why didn't I recommend it. Halifax criteria is that they will not allow any gaps of longer than 5 weeks - 6 at an absolute push - in the last 12 months if you haven't got at least 6 months remaining on your contract, without very good reason ("It was my choice" is the most common one - not good enough for Halifax). Now; I know, and so does Broker X, that if a Halifax mortgage is less than £300,000, it goes to their standard underwriting team rather than the 'Premier' underwriters, and it's extremely unlikely that they would even look at the client's CV, so it may well be offered.

It is, however, outside Halifax lending criteria, and so I would not recommend them. As Broker X has done however, and their rate is maybe 0.2% better than what I've offered, I get labelled a rubbish broker as I couldn't get the same deal, when the reason I didn't recommend it is that that client is outside their criteria, and as such, the case could (and probably should) be declined.

Who is right?

That fits in with your scenario a little (possibly, you may well have never spoken to us!? ) as you could walk into Halifax tomorrow and apply for that mortgage and it could well be approved.

It comes down to what is 'right' and what your definition of this is, I guess. I don't feel comfortable recommending something that is not technically available to someone, on the chance that it might slip through the net, as I don't feel that's doing the best for my client. Others may feel differently, and that 'it's worth a shot' as some brokers would put it.

Maybe not particularly pertinent to your point but it's something that not many clients consider, and is one of the difficulties of our job.

[SueEllen]

possibly, you may well have never spoken to us!? )

No didn't speak to you.

Also my contracts tend to be 1-3 months then extended. I rarely have a contract which has 6-12 months on it.