How to Secure the Best Mortgage Rate as a Contractor
How to Secure the Best Mortgage Rate as a Contractor
Blog Article
Why Contractors Often Pay Higher Rates
Contractors can sometimes face higher mortgage rates compared to permanent employees. This is mainly due to the perceived risk by lenders, as income can fluctuate or be inconsistent. However, with the right approach, you can still secure competitive rates that work for you.
1. Prove Your Income Clearly
Lenders typically assess mortgage applications based on income stability. As a contractor, it’s crucial to present your income in a way that reflects your earning potential. Most contractor-friendly lenders will use your day rate to calculate your annual income, making it easier for them to assess your borrowing capacity.
To prove your income, ensure you provide:
A copy of your current contract
Bank statements from the past 3–6 months
Proof of previous contracts (if applicable)
2. Work with a Contractor-Specific Broker
Using a mortgage broker who understands the contractor market is one of the best ways to secure a better rate. A broker from Contractor Mortgage Solutions will have established relationships with lenders who offer contractor-specific products. They know how to present your application in the best light and can help you access exclusive rates.
3. Consider the Length of Your Contract
Lenders may be more likely to offer better rates if you have a long-term contract or multiple renewals. Contractors with a stable history of contract renewals often have an advantage over those with gaps between contracts. The longer your contract term, the more confident lenders will be about your ability to repay the loan.
4. Maintain a Strong Credit Score
Your credit score is one of the most important factors in determining your mortgage rate. A higher credit score means you're a lower-risk borrower, which can result in better rates. Make sure to:
Pay off existing debts
Avoid late payments
Regularly check your credit report for errors
Get the Best Deal with Expert Help
Securing the best mortgage rate as a contractor doesn’t have to be difficult. At Contractor Mortgage Solutions, we help contractors access the best deals based on their unique circumstances.
Contact Us Today
Reach out today for a personalised consultation and find the mortgage rate that’s right for you.