Problems when Arranging a Mortgage for Contractors
If you look at your surrounds, you will find a lot of friends who have been victims
of the severe hassles when trying to arrange a mortgage for contractors. Contractor Mortgages cater specifically for contractors and freelance workers, who cannot prove their exact income, and are not on a fix salary. After all the anxiety of getting documents together, paying taxes for the preparation of documents, and finally after two weeks of waiting for your contractors mortgage to get approval, you receive the answer that you have been rejected. The reasons that their mortgage may have been denied may simply be the necessity of additional documents or maybe the bank would just like to see the accounts.
When you are just starting out as a contractor, there can be several problems:
1. The money you are making. For some mortgage lenders there is a big difference between self-employed wages and permanent employment salaries. There are many cases in which the self-employed wage is even bigger than the permanent salary. This is something that you must bring to the attention of your lender in order to get a better chance of approval.
2. It is always great to be a contractor or freelance worker as you do what you wish and work for yourself, though that doesn't always mean there is a lot of money in it, and it can be harder to prove your earnings.
3. It is important to plan your monthly contract mortgage payment on the same day or the day after you receive your earnings, this will prevent failure to pay or any delay in payment. It's better if your salary is paid directly into the account of the bank where you have your contractor mortgage. This will prevent you from forgetting the monthly contractor mortgage payment. There are options of automatic payments where the money is automatically withdrawn from the account.
4. Many contractors think that is better for them if they are in permanent employment in order to get a reasonable mortgage. It is a fact that most of the contractors have access to high street contract mortgages and there is no difference whether they are in permanent employment receiving a fixed salary or whether they are working for themselves receiving a variable wage.
There are many companies that offer specialized financial services for contractors. Many products suggested to the public by the lenders, are not suitable for contractors and freelancers. That is because of their variable incomes and difficulty in proving their wages. This is why often contractors and freelancers have a hard time getting a mortgage, unless it's specifically a contractor mortgage catering for them.
In order to set aside any misunderstanding, the contractor and the freelancers have to know about all these problems, and to be prepared for them. Special mortgages for contracts are now popular and widely used so contractors and freelancers do not feel discriminated by the mortgage lenders.
Problems when Arranging a Mortgage for Contractors
By: Sue Mitchell
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