Eligibility for these mortgages are often based on several key points, such as whether the applicant is a contractor, and how much their estimated annual earnings are.
Other factors, such as a solid account history and a good credit rating, are also important as many lenders factor these in when making their decision. The down payment amount may also be a factor, but is often looked at on a case by case basis.
Check The Lending Requirements
Every lender has their own set of criteria that applicants must meet in order to get a positive decision. Most of them have many similarities, but it is important to check with specific lenders to ensure that all of the requirements are met.
In most cases, the biggest hurdle there is to securing an IT contractor mortgage is demonstrating income. The best way to do this is to provide either pay-stubs, tax forms, bank statements, or contract papers.
Some contractors find that providing a combination of these documents increases their success rate, while others may have good results with just their most recent bank statements.
Good Ratings Are Important For Mortgages
A good credit rating or score is important for a number of reasons. These numbers are used to calculate credit worthiness for credit cards, loans, and mortgages, which is why it is important to keep everything in good standing.
A good tip when planning to apply for self employed mortgages is to check the credit score ahead of time to make sure that there are no negative accounts or derogatory remarks. If there are any remarks or negative accounts, they should be rectified before applying if possible.
Credit monitoring services are often a good choice for those who are planning to apply for a mortgage as they permit daily checks without negatively impacting the score. This makes it easy to see if there have been any changes that might affect the lender’s decision.
Another important factor is whether the down payment is ready. As some may find, many mortgages for IT contractors will require some form of down payment in order to make the monthly payments affordable.
The amount that will be needed depends on many different factors, such as total income and credit score. Those who may have a less than ideal score may find that a larger down payment works in their favour.
Contract And Work Prospects Are Promising
Before taking on any large financial commitment, contractors should always evaluate whether their contracts or work will be steady enough for them to pay all of their expenses with some funds left over.
Most lenders will require that there be at least six months of work done, with some requiring as much as three years of contract work. This does vary, so contractors may have to look around in order to find a lender who will work with them.
It is important to keep in mind that three years of records are not always a requirement, as there are still ways to get approved even if the contracting position started recently.
These are just a few of the key factors in getting approved for an IT contractor mortgage in order to purchase a new home. There may be other factors, but these often depend on the lender or situation.