Did you know a whopping 34% of individuals who make financial decisions without seeking advice end up regretting their choices? Making the wrong financial move can be both costly and stressful, but that’s not going to be you. When it comes to your mortgage requirements, seeking expert advice is essential to help you make smarter choices that can save you time, money and hassle. In this post, we’ll take a look at why using a specialist broker should be a no-brainer for contractors and company directors like you.
Specialist Mortgage Advice for Contractors and Company Directors
High Street vs. Contractor Mortgages: Know the limitations
Your income as a contractor isn’t typical PAYE. This non-standard status tends to deter or at least confuse over-the-counter lenders, leaving you with less than satisfactory outcomes. Traditional high street providers struggle to assess a contractor or freelancer because their earnings are variable and can be paid in a number of ways, whether it’s via an umbrella or limited company or directly from clients. Meanwhile, the short-term nature of contracts alone worries traditional lenders enough to perceive you as a risk without considering the bigger picture. Even if you have a solid work history of repeat contracts, they focus on the contract length alone and far prefer the perceived security of customers compensated via PAYE. As a result, you’ll see increased premiums or your application declined.
Jump-Start Your Mortgage: The specialist advantage
Specialist brokers get what you do and how you earn. They have direct access to underwriting teams that understand the ins and outs of contracting. These underwriters are not accessible to applicants directly, because they expect the broker to have correctly vetted the contractor in advance of submitting any application. Say goodbye to generic applications that don’t fully capture your unique status as a specialist borrower, contract brokers are fluent in your earnings language. They’ll take a close look at your yearly income and may even discover that you earn more than your PAYE counterparts. Then, should the underwriters need further explanation; your broker has you covered. Generic brokers don’t have these relationships in place, nor do high street lenders, which is why they often fail to even identify you as a specialist borrower in the first place.
Protect Your Credit Score: Avoid the application gamble
No more hopping from bank to bank; specialist brokers assess your full work history and interpret your contracting income accurately. By finding you the right mortgage for your needs, they can protect you from the multiple mortgage application rejections you might experience on the high street that put a mark on your credit history each time. Conversely, a specialist contractor broker finds mortgages that work for you and that are likely to be approved. Why take chances when you don’t have to?
Know the Difference: Self-employed vs contractor mortgages
But hey, a high street lender offered you a mortgage tailored for limited company contractors. That’s a special mortgage for you, right? Unfortunately, it’s more likely to be an off-the-shelf self-employed mortgage, which is not ideally suited to contractors with a limited company. A self-employed mortgage uses your SA302 to evidence your income rather than PAYE but, if like many you’re drawing a minimal salary and using dividends as your top-up, the majority of your income isn’t considered by the lender, meaning you could be missing out on a far bigger mortgage with better terms.
Organise your day rate mortgage the easy way
For all your mortgage needs using a specialist broker will give you peace of mind that the policy, price, and conditions are right for you and your business. You should also check the firm’s review scores and how long they’ve specialised in the contractor, freelancer, and limited company space.
At Broadbench, our focus is on ensuring contractors and company directors receive the right support. We’re 5-star rated on Trustpilot and we work closely with leading mortgage lenders and our customers to find the perfect products, plus handle all the boring paperwork too. Want to hear more? Get in touch.Speak to an expert