Suffolk Building Society contractor mortgage lending criteria
Suffolk Building Society manually underwrites all its mortgage applications. That enables the team to discuss applications upfront with underwriters before offering a Decision In Principle. This common-sense approach allows the team to look into exceptions where the applicant(s) may fall outside of standard policy.
Professional contractors, including IT and umbrella contractors
Suffolk treats umbrella employees/contractors the same as limited company contractors. This means the lender works off gross contract day rates, not PAYE payroll payslips. Fewer and fewer lenders are offering this service, today.
Another standout policy is Suffolk’s approach to foreign national contractors. The lender is one of only a few to accept contracts that pay in a foreign currency. This is subject to a discussion with one of the lender’s BDMs before going to the D-I-P stage.
As Suffolk asks for no minimum income (from any contractor applicant), this opens a door that would otherwise remain closed (or at least ajar).
Work history and income assesment
Contractors must have a 12-month history within the same line of work as they’re contracting at time of applicaton. When the contract has less than three months remaining, underwriters will ask for at least the last two years’ contract history.
Suffolk offers the standard contractor income assessment:
- Day rate (£) x 5 days (per week) x 46 weeks (per annum)
The underwriters will then off a multiplier on top of this annualised amount to determine the amount the applicant can borrow. If the contractor’s income exceeds £100k per annum and they tick all other criteria boxes, Suffolk could offer a multiple of up to 5.49 x annualised income.
The highest loan-to-value Suffolk offers is 90% (10% deposit) across the board. The deposit the lender asks for may increase if the applicant has adverse credit or other unusual circumstances.
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Other areas of lending/USPs
If Suffolk isn’t flexible enough with its contractor-focused policies, the lender also offers:
- Joint Borrower/Sole Proprietor: can borrow up to 80% LTV
- Self-build and renovation: can borrow up to 80% LTV
- Expats: can borrow up to 80% LTV for residential, holiday lets and buy-to-let
- Later Life Lending: the lender has no maximum age
- SIPP/Pension fund income: Suffolk uses 80% of the fund value divided by the mortgage term
Another factor that might appeal to high-income contractors is Suffolk’s unique overpayment facility. The lender allows borrowers to overpay up to 50% of the original loan amount during the mortgage term. The interest you could save on your mortgage over its term would offer some consolation to paying tax in the higher tax band.
Credit History
Suffolk doesn’t rely on automated credit scoring, but conducts manual credit checks instead. This means underwriters can be more accommodating to minor credit blips, as long as the applicant offers a reasonable explanation.
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Fixed-term contractors
Suffolk can accept applications from fixed-term contractors where a fixed-term contract typically fulfils that role/line of work.
Underwriters would need to see a reasonable history of contract employment in that line of work. That, typically, would constitute two years or more, with three months remaining on the contract.
Alternatively, if the contractor has fewer than two years’ contracting history, Suffolk would consider them if their contract has at least 12 months left to run.
Other types of contractors
Zero-hours contractors
Zero-hours contractors must have at least 18 months’ track record of earnings on zero-hours contracts. Underwriters would also look for the level of earnings to be consistent.
Applicants must supply their latest three months’ payslips and the latest P60 to verify their income. Where payslips and P60 can’t evidence consistency of income, Suffolk may be able to make an exception and consider an employer’s reference. This policy would apply to Bank Nurses.
CIS Contractors
Suffolk treats CIS Contractors as self-employed, thus requires tax returns or accounts.
To get a baseline for affordability, underwriters can use either:
- Salary and dividend
- Share of net profit after tax, plus salary
Talk to the contractor mortgage experts
As the leading mortgage broker for contractors and the flexible labour workforce, you’ll be in safe hands with Freelancer Financials.
Freelancer Financials is an independent broker with access to every mortgage from every lender, meaning we can offer truly unbiased advice and find you the best deal for your unique circumstances.
Established more than 20 years ago, we have a proven track record of arranging over 30,000 mortgages for contractors, umbrella company workers, CIS subcontractors and the self-employed.
Our specialist broking team will support you throughout your mortgage journey, and we have nearly 1000 5-star reviews from clients to prove it. Whatever your mortgage needs, it’s time to talk to the experts.
Suffolk in a nutshell
Suffolk Building Society takes a common-sense, manual approach to underwriting, allowing far greater flexibility than most high-street lenders.
It doesn’t matter if you’re a professional contractor, umbrella worker, fixed-term contractor, or have a complex income structure. Suffolk has a reputation for saying “yes” where others say “no.”
Suffolk’s broker-focused approach makes them a standout choice for clients who don’t fit the “one-size-fits-all” model.
To begin your enquiry, talk to our experienced advisers today.
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