The issue for most contractors obtaining a mortgage is that most lenders are biased towards IT contractors. Clydesdale has a more inclusive approach.
Contractors
Clydesdale Bank will accept applications for contractors in the following professions:
- IT sector
- Oil and gas sector
- Accountants
- Solicitors
- Actuaries
- Banking professionals (subject to a minimum of 2 years contracting history, and a minimum contract rate of £75,000 pa based on 46 weeks employment)
- Compliance professionals
- Engineers (subject to a minimum contract rate of £75,000 pa based on 46 weeks employment)
Mortgage Products
The Clydesdale offer one of the widest product ranges.
90% Loan to value
Offset
Low Start (interest only for the first three years/max 80% loan to value)
Calculating Income
In assessing affordability, applications for contractors who have been self-employed for 2 years or more (the applicant must have had their contract renewed at least once), we will take the:
- Average weekly rate from the current/previous 2 years’ contract × 46 (for any contracts of less than 35 hours per week, we will calculate income pro rata)
- Offshore income structures are not acceptable.
The Halifax has two advantages compared to the Clydesdale. They will lend on the 48-week value of the contract and for the same income lend a higher amount.
Documentary Evidence Required
- Clydesdale requires copies of the current contract and previous contracts covering the previous 2 years. Where the contract has been renewed by the same employer, they will require the original contract plus the renewal pages detailing the contract rate and period of the contract.
- Clydesdale will accept applications from contractors where there has been a maximum gap of 6 weeks each year between contracts. If there is more than 6-week gap, they will use their self-employed policy to calculate income.
Contractors With Less Than 2 Years Contractor Experience
Clydesdale can accept applications from contractors with less than 2 years contractor experience providing the LTV is a maximum of 70% and subject to:
- Previous employment immediately prior to contracting to be in the same industry
- Income calculated on the average of the current weekly contract rate x 46 and the last year’s employment income on the p60.
Another important area for contractors to consider is protection.
Why Use Neil Soundy Financial Services For Your Mortgage Advice?
- We are experts in SPV / Ltd Co lending.
- Your initial consultation is free with no obligation
How Much Will It Cost Me For Your Advice?
A fee of £495 is payable on completion of the mortgage and Neil Soundy Financial Services Ltd will keep the commission received from the lender for arranging the mortgage.
Neil Soundy Financial Services Ltd is an appointed representative of HL Partnership Ltd which is authorised and regulated by the Financial Services Authority.
The Financial Conduct Authority does not regulate some forms of buy-to-lets.
We do not give or imply legal or taxation advice. We recommend you contact a solicitor or accountant for advice in these areas.
Think carefully before securing other debts against your home/property. Your home/property may be repossessed if you do not keep up repayments on your mortgage.
