Make your mortgage hunt easier with CMME

Mortgages. Securing one can be a daunting challenge at the best of times. But for self-employed professionals, it can seem so daunting that many are actually put off the idea altogether, choosing instead to rent for the foreseeable future. But is it really that difficult for contractors and the self-employed to get a mortgage?

Well, not necessarily. Of course, working contracted hours can make getting accepted for a mortgage a little more complicated. But Contractor Mortgages Made Easy (CMME) have a whole range of hints and tips to improve your chances and make the whole process easier. Here are just a few to get you started:

1: Know your contract, and make sure it’s up-to-date.

If you’re thinking of starting a mortgage application, make sure you have a copy of your most up-to-date contract to hand. You need to be able to show lenders not just your income level, but also how long you’ve got left on your current contract.  

2: Avoid big breaks between your contracts.

Working as a contractor has many perks, not least being able to take a break between your contracts. For many, it’s the perfect opportunity for holidays and globe-trotting. But make sure your breaks aren’t too big: do your best to avoid breaks of more than 6-8 weeks. And if you are going to take big breaks, make sure you don’t make a regular habit of it. Lenders want to see consistent income and contracts stretching back 12-24 months, so they don’t tend to look favourably on significant gaps.  

3: Be realistic and keep things affordable.

One mistake many contractors make when looking at mortgages is that they’re unrealistic about their repayments. All too often, they overestimate what they can afford to pay. Lenders see right through this: when you’re putting your mortgage application together, make sure the repayments you’re proposing are actually affordable.

4: Pay at least a 10% deposit.

When you’re applying for a contractor mortgage, you need to be ready to pay a fairly sizeable deposit. Nowadays, most lenders will ask for at least 10%.

5: Avoid high street lenders.

For many contractors, high street mortgage lenders are where the difficulties start. Although you might find that your first-stage application to a high street lender is accepted in principle, this is most likely because their initial credit checks are very light and superficial. It’s at a later stage, when you’ve placed an offer on a property that they’ll generally do the more thorough checks and withdraw the mortgage offer.

To make sure this doesn’t happen, do your homework and look for specialist lenders and brokers. Companies with experience and specialist expertise in contractor mortgages are a much safer bet, and a specialist mortgage broker like CMME is a good place to start.

6: Find mortgages that allow additional payments.

For many contractors, fluctuating income is just par for the course. You’re sometimes much busier, or just have particularly high-value contracts. The up-shot is that at certain times you’ll have a lot of extra cash, so if possible, find a mortgage that will allow you to pay off extra chunks of the overall amount on top of your monthly repayments. It will help you make the most of your income and pay off your mortgage much more quickly.

There’s no doubt that contracting makes finding a mortgage that extra bit more complicated. But there’s plenty you can do to improve your chances and make things easier for yourself. For even more tips and advice, visit our website.

Meet the author

Tristan Grove

Press & Public Affairs Officer