We’ve partnered with CMME to produce a guide to mortgages for all self-employed professionals, to give you an idea of the types of contractor mortgages which are available, and how your new career path needn’t be a hindrance to obtaining a mortgage. Whilst we have set out some of the general considerations, you should consult with a financial adviser for advice specific to your circumstances.
When you make the move into self-employment, it can play havoc with your personal finances and in particular, your ability to secure a mortgage on your home. Historically lenders have treated freelancers with a lot of trepidation when it comes to offering mortgages due to the increased risk of irregular income.
Types of Contractor Mortgages available
These are likely to be familiar to you when it comes to getting a mortgage for your home, but depending on why you are looking for a mortgage in the first place may impact on the choice of mortgage you have.
If you’re looking to keep your repayments at the same rate over a certain period, then you’ll be best off opting for a fixed rate deal. Lenders usually have deals fixing your rates for 2,3,5 or 10 years, but these rates are often higher than other products.
If you’re looking for a variable rate with a difference, then try a capped rate. Whilst your repayments will vary, you’re protected by a rate rises over a certain percentage. These deals are less common, and you’ll still pay a higher rate than other products.
These types of rates include Trackers, Standard Variable and Discounted. All of which mean your repayments can go up or down, although for the most part, they will have the best interest rates and lowest arrangement fees.
Additional Mortgage fees you’ll have to consider
Here’s a quick review of some of the additional fees you’ll incur no matter what type of mortgage you choose.
- Arrangement Fees – The fee charged by your lender to set up your mortgage.
- Valuation Fees – The fee charged by your lender to value the property.
- Legal Fees – The fee charged for any legal work conducted for you.
- Stamp Duty – The fee you pay the Government when you purchase a property.
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