One of the reasons Roots Mortgages exists is to help people navigate what we believe to be a peculiar element of the overall mortgage market.
This element is the reticence of some mortgage providers to accommodate for modern ways of working. This includes contractors and freelancers, who historically have found securing mortgages more challenging than it should realistically be.
We get that mortgage lenders have to cover themselves. That’s natural and understandable.
But with the vast majority of contractors in a position to safely and securely pay mortgage payments with unerring regularity, making these contractors jump over hurdles constantly seems unnecessary.
Granted, there has been a better understanding of the way contractors operate and their reliability as mortgage customers in recent years. But there are still challenges faced.
Thankfully, more and more providers and making changes favourable to contractors. One such provider is Metro Bank.
What has Metro Bank done?
Metro Bank has essentially adopted a more relaxed approach to providing contractors with a mortgage offer. This is by removing the need for contractors to have had 12 months’ experience working in a fixed term role.
According to Mortgage Strategy, an email to brokers from Metro Bank confirmed that this requirement will be overlooked, so long as applicants can confirm they have 2 years of continuous experience in the same industry.
A contractor’s annual salary will be calculated by multiplying their daily rate by five, and then multiplying this figure by 46 to represent weeks worked per annum. This will not be the case if a contract has fewer than 46 weeks of work specified.
This offering is available to contractors across industries, and contract gaps of up to six weeks in the last 12 months will be allowed.
Is this a good thing for contractors?
Absolutely, and it is something that the vast majority of contractors seeking a mortgage will be able to meet.
In the modern age, people seeking mortgages are more than aware of the need to be in a strong financial position. As a contractor, the best way to achieve this is through continuous, stable work and contracts.
This means that most contractors are actually very strong mortgage candidates. But the systems at play are often unreasonably frustrating for contractors seeking that desired mortgage.
Moves such as this from Metro Bank ultimately make it easier for contractors to find that perfect deal for their needs, and should certainly be welcomed.
However, the market can be a tricky place to negotiate at the best of times, and arguably more so as a contractor or freelancer. So getting a helping hand from specialist contractor mortgage advisors can help ensure a smooth path to your chosen home is secured.