Originally posted by itsnotarace
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As Martin@AS fiancial pointed out you can go down the self- employed status route (assessed on your accounts) or apply for a contractor mortgage (assessed on your contract rate alone).
If you take the self employed status route, you have a wider choice of lenders that you can apply to but each lender assesses affordability in a different way. There is no universal standard I'm afraid. The majority of lenders will take the average drawings (salary plus dividends) and then apply their affordability calculator based on your credit score and any commitments in the background. More flexible lenders will consider share of net profits and directors salary. These tend to be Virgin, Coventry, NatWest, Woolwich and Clydesdale. In the the majority of cases this allows you to borrow substantially more.
If you want to go direct, then you need to do your own research to find out which lender would give you the most favourable solution.
If your accounts don't stack up, then you can resort to using your contract rate. However, because of the 5 month break, you can only really go to one lender, Halifax. Unless you can get an exception from one of the other contractor mortgage lenders, which is going to be tight. The rates at Halifax are quite competitive at the moment.
There are also a few mortgage specialist like ourselves on this forum, like Martin@AS Financial, Power Mortgages and Contractor Money that can also help if you need a mortgage broker.
I'd love to hear how you got on.
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