Sadly, Concrete Contractor Westlake Village CA and freelancers have always struggled to get a competitive mortgage. As the financial crisis deepens, this means that contractors will often miss out on the dream home as they face even more barriers towards obtaining a competitive mortgage rate from high street lenders. Whereas, people in permanent employment have attracted favourable rates due to lenders having an unfair bias towards them. This is because lenders view permanent workers as less of a risk than contractors.
Unfair as it may seem, this bias is still strong today if not worse due to the financial crisis. Unfortunately contractors are neither seen as employed or self-employed, somewhere in between the two, which makes it hard for lenders to determine the potential affordability of contractors. It is made even more complicated by the fact that many contractors work through a number of trading structures and payment mechanisms, including Limited company, UK Payroll umbrellas, Tax efficient offshore trust. Since the credit crunch many lenders have streamlined their underwriting and processing, underwriters are not trained to understand the unique nature in which contractors are paid, which is why many contractors fail to get a mortgage
Help is at Hand!
Over the years, as the contractor market has grown and expended, a number of professional organisations and institutions including PCG, Social Networking sites, Contractor Accountants, Recruitment agencies, and Financials advisors have worked hard to convince a number of banks to view contractors differently.
This has given birth to Contractor Mortgages! This enables contractors working through different trading structures to obtain a mortgage. A number of contractor mortgage specialists have lobbied to get lenders to alter their lending policy towards contractors. This has meant that lenders are reviewed their traditional underwriting criteria to accommodate contractors.
It is now possible, irrespective of whether you operate through a limited company or umbrella company to be assessed on your contract rate. In essence this means that you no longer have to provide financial accounts, pay slips or P60s which often don’t reflect your potential affordability.