Kensington Contractor Mortgage Lending Criteria
Kensington is the latest specialist mortgage lender to declare its doors open to contractors. This declaration is a perfect fit alongside its key strategy: to focus on niche sectors of mortgage lending.
The Kensington brand may not roll off the tongue as synonymous with mortgages. Even so, their award-winning lending strategy has seen them recognised twice in the last year alone.
The Kensington Difference
Most other contractor-friendly lenders demand at least 2-years contracting history. Kensington, like Halifax, comes up trumps in only asking for 12 months continuous history.
And, like Clydesdale, their underwriting staff can be flexible if a case so warrants. We have managed to get cases approved where less than 12-months trading history is evident.
An added bonus is that the specialist lender has invited all contractors to the party, not only IT professionals.
Many other contractor-friendly lenders only accept professionals from IT or a specific industry sector. Kensington has removed this barrier to match the UK's growing number of independent professionals.
The lender has also removed the lower earnings threshold imposed by Halifax and Clydesdale. The latter will both only entertain contractors who earn more than £312.50 per day or £75k per annum. Removing these limits will open the door to many more self-employed professionals hoping to buy a home.
What you need for a Mortgage with Kensington
Kensington calculates your annualised earnings by multiplying your weekly contract rate by 46 weeks. This helps determine your affordability; or, in English, how much you can borrow.
This figure is then entered into an equation that takes other details about you into account. The net result will determine your maximum mortgage loan based on your current contract.
Kensington Lending Criteria:
The major advantage of Kensington is its policy to not discriminate between IT and non IT Contractors. However, they do:
- require a minimum of 12 months contracting history;
- calculate earnings over 46 weeks,
- annualised income calculated at ((daily £ rate x 5) x 46);
- not like to see more than 6-weeks gap between contracts unless there is a good reason;
- consider less than perfect credit history!
That last point is well worth mentioning again. The Kensington team is willing to consider applicants who have a less-than-perfect credit history.
If you've made mistakes in the past, they need no longer be your barrier to entry to the contractor mortgage market.
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.