Bluestone Mortgages contractor mortgage lending criteria
Bluestone Mortgages, part of the Shawbrook Group, is a specialist lender that goes the extra mile for contractors. Its policies go that one step further than other lenders, ideal for contractors with complex situations, such as:
- adverse credit;
- inconsistent income;
- a recent divorce;
- contractors returning to work after a life event;
- day-one contractors (with a minimum of six months’ industry experience).
On top of this, Bluestone even allows 48 weeks of earnings in their affordability calculation, rather than the more usual 46, giving you every chance of qualifying for the mortgage you need, whatever your circumstances.
Benefits that transcend the need for cheap interest rates
Bluestone’s willingness to assess complex applications extends to both residential and buy-to-let mortgages. As such, they’re a boon to contractors with adverse credit and who have been let down by mainstream lenders.
In truth, Bluestone is unlikely to be the first choice for many contractors due to their higher interest rates. But, the lender is a popular choice for those with long gaps between contracts and payment problems.
As well as the benefits listed, Bluestone also offers:
- a flexible attitude towards missed and late payments, and
- allowances for gaps of up to 6 months between contracts in the last 12 months
Bluestone's contractor lending criteria
The lender applies the term ‘contractor’ to different roles and payment structures across a wide range of industries. Bluestone’s flexible approach to contracting is apparent in its contractor-friendly lending criteria, as it:
- has no minimum income expectations;
- accepts contractors from all industries and occupations;
- allows up to 6-week gaps between contracts over the last 6 months, but can be flexible on this criterion;
- offers mortgages from as low as 10% deposit (90% LTV);
- uses day rate × 5 × 48 weeks in its mortgage affordability calculation;
- uses day rate income even if the contractor’s payment structure is a limited company;
- uses an umbrella employee’s contract rate in its affordability calculation, not payslips;
- accepts SA302s or 12 months’ remittance slips for CIS contractors, zero-hours contractors, agency workers and locums.
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Income criteria for temp, agency and zero-hours contractors
Bluestone’s lending criteria for the ultra-flexible workforce are as flexible as the workers themselves. Bluestone expects applicants to have had 12 months’ continuous contracts. In addition, the applicant must have worked their current role for three months, minimum. And there cannot be gaps of more than six weeks between contracts over the last 12 months.
With regard to future cover, contractors must have at least three months remaining on their current contract. If the contract is due to expire before that, applicants must get their employer’s written confirmation that they will renew the contract. That renewal must cover at least up to three months before the mortgage completes.
Affordability assessment
To work out affordability, Bluestone will use the average of the applicant’s last 12 months’ earnings. If their latest contract is, or their employer has confirmed their income level is guaranteed to be, higher, they will use that higher figure.
To evidence that affordability, temp, agency and zero-hours contractors must provide:
- copies of their last three months’ payslips, and
- evidence detailing their last 12 months’ income.
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Income criteria for CIS contractors
Bluestone welcomes workers from the Construction Industry Scheme. The bank will use the average of the applicant’s last 12 months’ earnings from invoices, vouchers or their latest as the baseline for the affordability calculation.
CIS workers must therefore provide the following documentation as evidence of their income:
- their employment history over the last 12 months (e.g. CV);
- 12 months CIS vouchers or SA302s as income;
- three months’ bank statements.
Bluestone mortgages in a nutshell
Bluestone focuses on helping contractors with credit challenges. It also offers flexibility for day-one contractors. These make the lender a good choice for those who might not qualify with traditional lenders.
However, it’s important to consider all Bluestone’s requirements governing the contract length. If you meet those criteria and have a complex history, Bluestone could be the lender you’ve been looking for.
Does Bluestone sound like the right lender for you?
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