Furness and Newbury Contractor Mortgage Lending Criteria
You don't have to be big to be beautiful. Point in case, two of the smaller building societies in the mix. Our mortgage lenders guide just wouldn't be complete without mentioning them.
Both the Furness and Newbury Building Societies add dimensions uncommon on the High Street. Neither demand that contractors work in a specific sector. Nor do they penalise you for not earning enough to retire at the age of 35.Please do bear in mind that, due to their size, they're not the quickest. Nor do they have access to the funds that the larger lenders with whom we deal have.
That said, they've earned their rite to be here; herewith, our overview of both lenders…
Furness Building Society
Furness is willing to consider ALL contractors applications, working across industry's many professions. That said, they do have some stringent requirements.
Furness Lending Criteria:
If you've owned a home as a permie, Furness mortgages will have a ring of familiarity about them. That said, their lending terms are quite unique.
But rest assured, Furness contractor mortgages lending criteria just works; here's how:
- your current employer must have renewed your contract at least once;
- if that's not possible for you? Your current contract must be for at least 12 months, with at least 6 months left to run;
- the maximum LTV is 80%, so you need a deposit of 20% or more;
- you must submit an up-to-date CV detailing your work history for the previous two years;
- you have to have been working in similar employment for those two years;
- you must provide copies of those contract(s) covering the last two years employment;
- the dates of those contracts must not show any significant breaks between employment;
- Furness mortgages use 46 working weeks a year to work out a contractor's affordability.
Furness will now also consider clients who've taken time out of contracting. Again, there are conditions.
The applicant must have taken less than 6 months off and have been back contracting for at least 6 months.
The lender will still consider contractors falling outside of this criterion. However, their prior track record must be impeccable.
It's worth repeating, processing time can take longer at Furness than with larger lenders. And, yes, they have limited funds due to their size, but size isn't everything.
Newbury Building Society
It's always pleasing to see new lenders grasp the concept of contract-based mortgage underwriting. Newbury Building Society is one of those and adds another dimension of flexibility to our bow.
It is worth noting that they're only a small mutual society. Like Furness, they have limited funds and can take a while to process applications.
To counterbalance this, they're willing to assess contractors on a case-by-case basis.
Yes, they assess applicants based on their contact daily rate. But with a manual approach, the Newbury underwriting team can be flexible on policy.
They're also not like some lenders who only offer contract-based underwriting to IT contractors. Newbury B. S. has a far more flexible setup and can accommodate contractors across all sectors.
The icing on the cake is that they place no minimum restriction on contract earnings.
How to approach smaller contractor-friendly lenders
With both the Furness and Newbury you should go through a specialist mortgage broker. A contractor mortgage broker can highlight your affordability better than mainstream lenders.
This is crucial if you want a quicker turnaround. It's critical if you want the mortgage provider to see what you can actually afford.
The more either building society can see at a glance, the better your chance of getting a mortgage with them. From experience, we know it's the details that count with contractor mortgage applications.
Dealing with small, flexible lenders can take longer, but can also reap greater dividends. If it's the personal touch you need, the Furness or the Newbury could be the lender for you.
John Yerou is a pioneer of contractor mortgages and owner and founder of Freelancer Financials, Contractor Mortgages®, C&F Mortgages and Self Employed Mortgages, trading styles and brands of the award-winning Mortgage Quest Ltd.