Reply to: Mortgage Advice from fellow contractors

[barrydidit]

Presume the typical contractor friendly mortgage that takes into account contract rate is aimed more at those working via Ltd rather than say an umbrella where PAYE may come into play?

What you're talking about is how income is assessed, which will be governed by individual lenders policy rules. Like the ones i'm currently mapping for ClientCo Yes, they know the difference between brolly and ltd when it comes to remuneration models but that's unrelated to the products which are offered either via branch, B2C or B2B channels.

Now stop distracting the OP, I think he/she was going to tell us about his/her favourite Gladiator.

[SueEllen]

By time you've built up enough credit history to get a mortgage you may have earnt enough through contracting to not need a mortgage or only a small one.

Presume the typical contractor friendly mortgage that takes into account contract rate is aimed more at those working via Ltd rather than say an umbrella where PAYE may come into play?

Not everyone lives in the backend of no-where and has no children.

[Hobosapien]

By time you've built up enough credit history to get a mortgage you may have earnt enough through contracting to not need a mortgage or only a small one.

Presume the typical contractor friendly mortgage that takes into account contract rate is aimed more at those working via Ltd rather than say an umbrella where PAYE may come into play?

[AtW]

The banks won't lend for a flat above a kebab shop anymore. Particularly with a DFS credit default.

[northernladyuk]

My advice is not to have a mortgage

HTH

The banks won't lend for a flat above a kebab shop anymore. Particularly with a DFS credit default.

[swamp]

In the first instance it would be much better if you use a decent mortgage broker.

complete-mortgages.co.uk are very good, but there are others you may want to try.

There are thousands of mortgage products out there. Being a contractor will reduce this to several hundred. Being a contractor with a dodgy credit history will reduce this much further, but there will still be products out there as long as the numbers add up.

ETA: Mortgage brokers have access to deals that are not available to the public.

[BlueSharp]

Hi,

Let me start by saying I hope i'm posting in the correct section of the forum! I'm looking to get a mortgage in the next 6 months and I am wondering how to maximise my chances of being accepted for a mortgage as a contractor. The main thing i've been trying to do is build my credit as previously I didn't have any. So far i've registered to vote and gotten an initial Barclaycard ( a entry level card ) from Barclays.

My first questions are how to build my credit with the credit card:

At the moment I have used my credit card very lightly ( limit is 1200 and I have used 125 of that) so:

1. Should I be using my credit card every month for it to make an impact on my score?
2. Should I have the credit card balance cleared before the credit sites such as Experian compile my monthly credit report or is it good to show a bit of debt when they are compiling the report to show I actually use my card?
3. Is it worth applying for another bit of credit such as an overdraft or will this just damage my score instead of improving it?

I also many years ago had a few instances of Wonga loans. These were all payed back on time but i'm aware that that could potentially appear on my credit report. They don't seem to appear there for Experian but I saw them appear in a credit report compiled by Noddle so I guess i'd ideally like to know if the banks would pick up on this and how much of an effect it might have on whether or not the banks will lend to me.

The other thing I was wondering is the current state of your contract. I had a friend apply for a mortgage that only had a couple of months left on his contract and got denied because there was not long enough left on his contract. Typically what would banks like to see in terms of a) how long you've been in your current one and b) how long you have left in your current contract?

Any other tips would be greatly appreciated but I think credit score and contract situation seem to be the biggest influences on getting accepted.

Also i've approached a couple of mortgage brokers already that haven't been too helpful so if anyone has a broker that perhaps specializes in contractor mortgages then I would love to reach out to them.

Many thanks,
Ben

Do you like gladiators?

[AtW]

Yeah but you waited until just before prices fell before buying...

I bought a cheap one first

[SueEllen]

My advice is not to have a mortgage

HTH

Yeah but you waited until just before prices fell before buying...

[Scruff]

Sign up for a proper free Credit Report

www.noddle.co.uk

This will give you a FULL report on yourself - it is updated once per month. You get one email from Noddle and no nagware.

Brilliant service (I have no connection to them, other than a satisfied user for the past 4, or so, years).

Once you have signed up and activated it, you will be able to see your Credit Score, and all activity (loans / credit cards / electoral register / searches) immediately.

[AtW]

My advice is not to have a mortgage

HTH

[WTFH]

What sort of LTV are you looking at?

Having a good credit score is important, but so is putting down a nice big deposit.

[d000hg]

Sign up to https://www.moneysavingexpert.com/creditclub

[tarbera]

??

Hi,

Let me start by saying I hope i'm posting in the correct section of the forum! I'm looking to get a mortgage in the next 6 months and I am wondering how to maximise my chances of being accepted for a mortgage as a contractor. The main thing i've been trying to do is build my credit as previously I didn't have any. So far i've registered to vote and gotten an initial Barclaycard ( a entry level card ) from Barclays.

My first questions are how to build my credit with the credit card:

At the moment I have used my credit card very lightly ( limit is 1200 and I have used 125 of that) so:

1. Should I be using my credit card every month for it to make an impact on my score?
2. Should I have the credit card balance cleared before the credit sites such as Experian compile my monthly credit report or is it good to show a bit of debt when they are compiling the report to show I actually use my card?
3. Is it worth applying for another bit of credit such as an overdraft or will this just damage my score instead of improving it?

I also many years ago had a few instances of Wonga loans. These were all payed back on time but i'm aware that that could potentially appear on my credit report. They don't seem to appear there for Experian but I saw them appear in a credit report compiled by Noddle so I guess i'd ideally like to know if the banks would pick up on this and how much of an effect it might have on whether or not the banks will lend to me.

The other thing I was wondering is the current state of your contract. I had a friend apply for a mortgage that only had a couple of months left on his contract and got denied because there was not long enough left on his contract. Typically what would banks like to see in terms of a) how long you've been in your current one and b) how long you have left in your current contract?

Any other tips would be greatly appreciated but I think credit score and contract situation seem to be the biggest influences on getting accepted.

Also i've approached a couple of mortgage brokers already that haven't been too helpful so if anyone has a broker that perhaps specializes in contractor mortgages then I would love to reach out to them.

Many thanks,
Ben

what is your current score?

[Martin@AS Financial]

Hi,

Let me start by saying I hope i'm posting in the correct section of the forum! I'm looking to get a mortgage in the next 6 months and I am wondering how to maximise my chances of being accepted for a mortgage as a contractor. The main thing i've been trying to do is build my credit as previously I didn't have any. So far i've registered to vote and gotten an initial Barclaycard ( a entry level card ) from Barclays.

My first questions are how to build my credit with the credit card:

At the moment I have used my credit card very lightly ( limit is 1200 and I have used 125 of that) so:

1. Should I be using my credit card every month for it to make an impact on my score?
2. Should I have the credit card balance cleared before the credit sites such as Experian compile my monthly credit report or is it good to show a bit of debt when they are compiling the report to show I actually use my card?
3. Is it worth applying for another bit of credit such as an overdraft or will this just damage my score instead of improving it?

I also many years ago had a few instances of Wonga loans. These were all payed back on time but i'm aware that that could potentially appear on my credit report. They don't seem to appear there for Experian but I saw them appear in a credit report compiled by Noddle so I guess i'd ideally like to know if the banks would pick up on this and how much of an effect it might have on whether or not the banks will lend to me.

The other thing I was wondering is the current state of your contract. I had a friend apply for a mortgage that only had a couple of months left on his contract and got denied because there was not long enough left on his contract. Typically what would banks like to see in terms of a) how long you've been in your current one and b) how long you have left in your current contract?

Any other tips would be greatly appreciated but I think credit score and contract situation seem to be the biggest influences on getting accepted.

Also i've approached a couple of mortgage brokers already that haven't been too helpful so if anyone has a broker that perhaps specializes in contractor mortgages then I would love to reach out to them.

Many thanks,
Ben

Hi Ben

You are taking all the right steps to building a good credit score. Banks tend to use Experian & Equifax as well as their own internal credit card when assessing you as an client. It is worth registering with one or both of the above as you can then see the gradual improvements you are looking to make.

Banks like to see that you can handle nominal amounts of credit so it is worth using your credit card instead of your debit card and then clear the balance in full every month. Do not under any circumstances make late or missed payments. I would suggest setting up a direct debit to ensure at the very least, the minimum payment is taken.

In response to Wonga, banks are generally not a fan as these are often seen as lenders of the last resort. However, it should hopefully not stop you raising finance for your new home.

Lastly, underwriters are looking for a good trail history within your field of expertise. Essentially they want to be able to see that you could source a new contract if the current one finishes. As a general rule, they like to see a month left at the point of application.

Hope that helps