Accord Mortgages contractor mortgage lending criteria
With flexibility and a common-sense approach to mortgage underwriting, Accord Mortgages is a fantastic choice for contractors.
The intermediary-only lender is particularly good at accommodating contractors with varied or complex circumstances. This makes it a trusted, reliable option for competitive contractor mortgages.
Income criteria for day-rate contractors
Day-rate contractors need to earn at least £50,000 per annum/£300 per day. They must be the only named service provider on their contract. And, they must have at least six months’ track record contracting.
Applicants can have no more than eight weeks’ gaps between contracts. If fewer than two months remain on their contract, they must secure a contract extension or renewal.
Underwriters will deduct umbrella payroll fees and deductions before the affordability calculation.
Accord’s day-rate income assessment calculation is:
- day rate (£) x 5 days (per week) x 46 weeks (per year).
Evidencing income for day-rate contractors
Day rate contractors must provide their current contract and previous contract covering a total of six months. It’s from this document underwriters will take your day rate figure.
If the applicant doesn’t have a previous contract and their current contract began within the last 12 months, they must provide:
- their previous employment contract, and
- their last P60.
Underwriters will use these documents to confirm the requisite industry experience.
However, Accord will assess unique circumstances on a case-by-case basis. This will help contractors with non-traditional setups.
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Lending criteria for fixed-term contractors
Accord will lend to fixed-term contractors providing they have either:
- 12 months left to run on their contract, or
- a 12-month track record of contract income.
Evidencing work history and income for fixed term contractors
Fixed-term contractors must provide a copy of the current contract and their latest bank statement.
If the contractor has fewer than 12 months on their contract, underwriters will ask for previous contracts (and a P60, where applicable).
If fewer than two months remain, the contractor must secure a contract extension or renewal.
If the contractor provides only their latest payslip, the most they can borrow is 75% LTV (must have a 25% deposit). If they provide their last three payslips, they can access mortgages that require smaller deposits.
Fixed-term contractors using umbrella payroll services must provide their latest:
- three months’ payslips or invoices, and
- three months’ personal bank statements.
Lending criteria for umbrella contractors
Only umbrella contractors with at least a two-year history of umbrella contracting can apply for a mortgage with Accord.
The umbrella payroll company must provide documentation covering the requisite period. This holds whether the applicant is a fixed-term or day-rate umbrella employee.
Accord’s day-rate income assessment calculation is:
- day rate (£) x 5 days (per week) x 46 weeks (per year).
Underwriters deduct umbrella payroll fees and deductions before the affordability calculation for day-rate umbrella contractors.
Fixed-term contractors using umbrella payroll services must also provide their latest:
- three months’ payslips or invoices, and
- three months’ personal bank statements.
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Lending criteria for zero-hours contract workers
Accord will accept zero-hour contract workers up to 60% of their earnings. They must, however, have at least 12 months’ evidence of sustainable income on a zero-hour contract basis and be in one of these occupations:
- Armed forces reserves;
- Care home workers;
- HGV drivers;
- NHS bank nurses and locums;
- Non-NHS bank nurses;
- Retained/on-call firefighters;
- Supermarket workers;
- Supply teachers.
To evidence that income, Accord asks zero-hour contract workers to provide:
- their last 3 payslips;
- the bank statement evidencing the salary credit from their most recent payslip;
- a copy of their current contract;
- a copy of their latest P60.
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Contracting history requirements
Accord also welcomes contractors with a limited contracting history. Contractors with less than a month remaining on their contract can also apply. They will, however, have to evidence continued income stability with a contract extension or renewal.
Locum income
Locums (excluding bank nursing) must exhibit at least six months’ history in that profession. Accord will then use 60% of that self-employed Locum sustainable variable income for their affordability calculation.
To evidence that sustainable income, locums must provide six months’ invoices or payslips, and their last three months’ personal bank statements.
Credit history
Accord is open to applicants with minor credit issues. However, they must provide a valid explanation for the blip and evidence of improved financial stability. This makes them a good option for contractors with prior minor financial issues.
Foreign nationals
Accord is happy to help secure mortgages for foreign nationals, with loan-to-value (LTV) ratios of up to 95%. The applicant must, however, have indefinite leave to remain. They must also receive their income in pounds Sterling. Accord will not lend on foreign currency.
Exceptional income assessment for multiple contracts
A standout feature of Accord is the lender’s ability to handle multiple contracts. Underwriters use the gross pay from all contracts to assess contractors’ income.
For example, imagine a contractor has one contract paying £400 per day and another paying £500 per day. Accord will then consider the total income to be £900 per day. This can significantly boost the applicant’s borrowing power.
Accord's unique features
Accord offers higher-than-average income multiples compared to many high-street lenders. This enables contractors to borrow more than they otherwise would through traditional routes. The lender’s common-sense and pragmatic approach makes it ideal for contractors with diverse financial backgrounds.
In a nutshell
Accord’s flexibility, willingness to work with multiple contracts, and understanding of the contractor lifestyle make it a solid choice for genuine contractor-friendly mortgages.
Does Accord sound like the right lender for you?
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