To get a mortgage, contractors must submit these documents
Given the trouble you may have had with lenders in the past, this is going to a nice surprise. We've made it easy for contractors to get a mortgage once they reach us.
I say 'we' as I can't guarantee what terms other specialist brokers have reached with their lenders. But these are the official documents we'll ask you for to make up your mortgage application.
A sensible underwriting process
The documentation you need for our mortgage 'package' is straightforward. Common sense has prevailed and streamlined the underwriting process.
Gone are the requests for three years accounts. Accountant's certificate? SA302?* Certificate of incorporation? You need none of these ephemera when you apply for genuine contractor mortgage.
Non-specialist advisers or your High Street bank may have told you otherwise. So there's a big clue there: if they ask for accounts, they're offering you a different product.
*Post-lockdown document update
Many clients have reported that, since the first wave of COVID, lenders have asked for SA302s. This document is standard for sole traders, freelancers and even company directors. Not so much for limited company and umbrella contractors.
So, as this request is an addendum to the norm, we asked the question of our lenders. And it turns out that underwriters could be using contractors' SA302s for a different reason.
For traditional self-employed people, the document is key to a lenders' affordability assessment. For contractors, lenders are using an SA302 as a safeguard for themselves.
One advisor told us that the bank he worked for was only using it to check that the contractor was paying their tax bill as they should. The article The real reason mortgage lenders are now asking for SA302s on our partner site delves into why lenders should be asking this now.
The synergy of specialist expertise
For contract-based underwriting, there are few factors that actually matter. That's because the education process into which we entered worked both ways.
We taught underwriters at our lenders what counted towards a contractor's mortgage affordability. They taught us what documents they'd need to approve a mortgage on that basis.
The result is that we only need five documents* from you to get a genuine contractor mortgage. To package your mortgage application the way all parties need and like to receive it, you’ll need:
- Proof of ID (a copy of a passport or driving license is suffice);
- Proof of address (a utility bill, credit card or bank statement);
- A copy of your latest contract, confirming your contract rate;
- *some advisors/lenders may ask to see your latest SA302 (see above):
- A copy of your latest CV, updated to show your recent work history;
- Bank statements (often 3 months, but can be more or even less) that confirm contract earnings.
That's it. Didn't hurt a bit, did it?