Yes, contractors can secure mortgages. While traditional lenders may have stringent criteria, especially regarding income verification, Watts Mortgages can connect you with lenders who understand the contracting landscape and assess your income more flexibly.

Lenders typically evaluate your income based on your contract rate. A common method involves calculating your annual income by multiplying your daily rate by the number of days worked per week and then by 48 weeks. For example, a contractor earning £400 per day over five days would have an assessed annual income of £96,000 (£400 x 5 x 48). 

The amount you can borrow depends on your assessed income and the lender’s affordability criteria. Generally, lenders may offer between 4.5 to 5 times your annual income.

While it’s possible to secure a mortgage with a smaller deposit, offering a larger deposit can provide access to more favourable interest rates and terms. A deposit of 10% or more is typically recommended. 

Not necessarily. Contractors are not automatically considered high-risk borrowers. Watts Mortgages can access competitive interest rates comparable to those offered to traditional employees. 

You’ll need to provide:

• Proof of identity and address: Such as a Passport, driving license, and utility bills.
• Evidence of income: Your current contract, recent bank statements, and, if applicable, company accounts or tax calculations.
• Employment history: An up-to-date CV demonstrating your work experience and expertise.

Yes, even if you’re new to contracting, you can still apply for a mortgage. Lenders may require proof of previous experience in your field and evidence of future income potential. A strong employment history and a current contract can support your application. 

Lenders prefer applicants with a stable income. If your contract is close to completion, providing evidence of contract renewals or upcoming projects can strengthen your application. Positive endorsements from your agency regarding potential extensions can also be beneficial. 

A good credit score is crucial for mortgage approval and securing favourable terms. Regularly review your credit report, address any inaccuracies, and maintain timely payments on existing debts to enhance your creditworthiness. 

Watts Mortgages have in-depth knowledge of the contractor mortgage market and established relationships with lenders who understand the nuances of contracting income. They can navigate the application process efficiently, increasing the likelihood of securing a mortgage that suits your needs. 

At Watts Mortgage & Wealth Management Ltd, we’re committed to guiding contractors through the mortgage process, ensuring you receive tailored advice and access to suitable mortgage products. Contact us today to discuss your specific circumstances and explore your options.