Pepper Money contractor mortgage lending criteria

Pepper Money imposes neither a minimum day rate nor income requirements on limited company contractors. And contractors from any industry sector can apply for a mortgage. To verify income, underwriters will ask for:

• Your latest contract
• Evidence of at least 12 months as a day-rate contractor

If an applicant’s contract is nearing completion, they’ll need confirmation a renewal or extension from the client/agency. To arrive at a figure for their affordability calculation, Pepper Money uses the lower of either the applicant’s:

• 12-month average day rate (£) x 5 days (per week) x 46 weeks (per year)
• Current day rate (£) x 5 days (per week) x 46 weeks (per year)

Umbrella contractors don’t need to hit a minimum day rate or an annual income threshold. Plus, they can work in any industry sector. What Pepper Money’s underwriters will want to see is:

• A copy of the applicant’s latest contract
• Evidence of at least 12 months’ contracting history
• Documentation showing that the contract is likely to be ongoing (a renewal or an extension)

Umbrella contractors will also need to provide their latest payslips. If those payslips don’t reflect the gross income (due to reimbursed tax deductibles), underwriters will use the lower of the applicant’s:

• 12-month average day rate (£) x 5 days (per week) x 46 weeks (per year)
• Current day rate (£) x 5 days (per week) x 46 weeks (per year)

Underwriters will then use the lower figure as the baseline for their affordability calculation.

Pepper Money welcomes workers from the Construction Industry Scheme. Underwriters typically calculate current income using an average of the income shown on the latest three payslips.

All CIS contractors must have at least 12 months’ employment history. Then, to support their application, they must submit their most recent:

• Three months’ payslips
• 100% completed SA302 self-assessment form
• Three months’ bank statements, which show receipts of their CIS income

Underwriters may also ask to see the applicant’s latest year’s accounts, where applicable.

Pepper Money can be fairly flexible in accommodating locums, agency workers and nurse bank staff. The lender is especially accommodating to NHS and key workers, such as nurses and doctors.

Underwriters will ask for the latest contract, plus evidence of 12 months’ employment with the same employer. They can add an extra layer of flexibility for locum workers.

Many adverse credit lenders require both partners to be on the mortgage, Pepper Money is different. It offers flexibility for individuals who prefer not to include their partner on the mortgage application.

Despite its higher rates, Pepper Money provides valuable assistance to contractors who might be considered un-mortgageable elsewhere. This is a key service, giving access to homeownership for those with complex financial backgrounds.

If your background isn’t straightforward, talk to our brokers about the flexible options with Pepper Money.