Mortgage application and bench time

[flamel]

Did you extend your loan by a significant amount? I'm going from £100k ->£180k

I was only after £15k - the IFA didn't mention amounts as such - it's partly due to the loan/equity value and partly due to two years accounts. They never asked me about the future

[d000hg]

I've never been asked anything about how much time I was on the bench. I've been asked how much I personally make each year, for the headline figures from company accounts, and to explain why these values varied, but not that.

[psychocandy]

Generally you need at least the last 12 months gap-free. If you've got this, you may have options regardless of even a six month gap 12+ months ago.

Two of the most prolific contractor lenders, Halifax and Clydesdale Bank, won't lend if you've had any more than c.6 weeks as a gap in the last year, unless there's a valid reason for it in their mind. Clydesdale are slightly more amenable to a sanction if the rest of the application is up to scratch, but with 6 months of gaps over the past two years, you really will struggle, sadly.

Even a week gap? As in finish one contract, get anohter straight away.

[Mark McBurney@CMME]

Even a week gap? As in finish one contract, get anohter straight away.

Hi Psychocandy,

No, in excess of 6 weeks in each calendar year.

Regards

Mark

[Mark McBurney@CMME]

I've never been asked anything about how much time I was on the bench. I've been asked how much I personally make each year, for the headline figures from company accounts, and to explain why these values varied, but not that.

Hi d000hg,

This is because using accounts is the more traditional 'self-employed' assessment of income, looking at historical income via accounts which is proven by the actual figures, so gaps don't matter - it should only become relevant about down time if you're looking to apply based on contractor-criteria (or sometimes with the few lenders who will look at 1yr accounting history, if you get a particularly anal underwriter!).

Regards,

Mark

[MarillionFan]

I was only after £15k - the IFA didn't mention amounts as such - it's partly due to the loan/equity value and partly due to two years accounts. They never asked me about the future

Just spotted your Avatar. Fantastic.

[d000hg]

Hi d000hg,

This is because using accounts is the more traditional 'self-employed' assessment of income, looking at historical income via accounts which is proven by the actual figures, so gaps don't matter - it should only become relevant about down time if you're looking to apply based on contractor-criteria (or sometimes with the few lenders who will look at 1yr accounting history, if you get a particularly anal underwriter!).

Regards,

Mark

So a contractor with bench time would be better off not using a special "contractor mortgage" if their income is sufficient for the amount borrowed?

[Mark McBurney@CMME]

So a contractor with bench time would be better off not using a special "contractor mortgage" if their income is sufficient for the amount borrowed?

Correct, provided that whichever figure of salary/dividends/net profit supports the level of borrowing required.