A mortgage is a loan against property which is lent to the borrower to meet his specific requirements. The borrower has to pay back this mortgage in the given period allotted by the lender at the specified period. Here you will know some ways to get a reliable contractor mortgage.
Ways to get a reliable contractor mortgage
Maintain a good credit score
Many contractors don’t realize the importance of maintaining a good credit score. This score may be the difference between the lender accepting your application or declining it. The first step of the mortgage process is obtaining an agreement in principle. This involves the lender carry out a credit search on you to determine your credit score.
Irrespective, of whether you can put a large deposit down or even substantial income, lenders will still decline your mortgage application if your score is poor. The current economic client has forced banks to tighten their criteria and to cherry pick those applicants with good credit scores. Always ensure you keep a clean credit history to avoid giving the lender an excuse to say no.
Always use a contractor mortgage broker
Many contractors are convinced that they can secure a mortgage on their own without the help of a specialist. This attitude quickly changes after they have approached several banks only to be declined. The problem lies with many local bank branch staff or calls centers. So if you’re fed-up of being asked questions that have no relevance to your employment status, pay slips, and so on, our recommendation is that you contract a contractor mortgage specialist who has experience arranging contractor mortgages. They give the best advice on contractor mortgages as well as take you through the procedure.
Get a mortgage considering your contract rate
If you’re fortunate enough to find a lender that doesn’t flinch after you’ve told them that you’re a contractor, they will then want to assess your affordability using their self-employed criteria for Limited company directors. This means that they will want to evaluate your mortgage borrowing considering on a narrow measure of your director’s remuneration, which may not adequately reflect the total earnings that you have at your disposal.
Choose a reputable lender.
Don’t just take the mortgage offer you secure. Instead, look for a lender that’s reliable, stable and able to give you quality customer service. A lending institution is one you will hopeful be dealing with for many years, so getting one with a stable history and good reputation should be a high priority.