|Mortgages and Affordability
Having launched our Mortgage Services page – increasing the scale of mortgages undertaken with professional advice, we thought we would provide an interesting reading point in relation to ‘Mortgage Affordability’
IT Contractors and Affordability
Back in the day, the default home for IT contractor cases was Halifax, but things have moved on and at least 16 lenders have contractor specific functionality in their affordability calculators. They all have different rules around minimum income, minimum contract length, contract gaps but they all look favourably on contractor income over salary and dividends.
To highlight the affordability advantage we tested a typical contractor example, 22 years at 84% LTV. Firstly, we ran the case as a contractor with £475 per day fees and then as an equivalent limited company director with £80k total salary and dividends. For the contractor test the difference between the top and bottom amount for the 16 lenders was over 30% – much larger than normal. The salary and dividends example gave a result from all lenders but all lower amounts, creating a huge top to bottom range.
I’m sure the contractor market will expand further as lenders recognise the benefits to them and potential clients. Currently some of the ‘big boy’ lenders are missing out! In the meantime, we take the strain, advising which lender offers suitable terms to meet your borrowing needs.
Statistic of the Week
Based on all ‘IT Contractor’ cases considered in relation to Affordability in the last month, the maximum affordability league tabletop five was:
- Scottish Widows
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This article is not designed as ‘advice’. Advice is always specific to an individual’s needs.
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We trust you find this article helpful. Have a great weekend.
Best Price FS Team