Vida Homeloans contractor mortgage lending criteria
Vida Homeloans helps contractors whose circumstances fall outside of the remit of more traditional mortgage lenders. The lender has built a reputation for supporting clients with adverse credit.
It also specialises in the buy-to-let market, particularly for limited company/portfolio landlord buy-to-let mortgages. The lender also offers a contractor policy that is competitive and in line with much of the market.
Umbrella contractors inside IR35
Vida Homeloans has no minimum income requirements for umbrella contractors. The lender also considers umbrella applicants from all industry sectors.
Applicants must have 12 months’ history in the same industry as their current contract. But that doesn’t all have to be as a contractor, so the lender can consider day-one contractors.
Any contract must have three months left to run at time of application. If it has fewer than three months, the contractor will need a renewal or extension.
As well as the contract with the umbrella payroll company, Vida ask for the outsourced contract, too. In addition to these documents, applicants must provide their last three payslips.
Umbrella contractor income calculation
Vida’s underwriters use a contractor’s weekly/monthly pay AFTER umbrella company deductions, but before NI and tax. They won’t incorporate any income annotated as ‘expenses’.
Underwriters will then annualise the net income over 48 weeks.
Borrowers can then access any tier of LTV Vida is offering at that time. This includes Vida’s 3 & Easy range (3% deposit mortgage range), providing the contractor’s credit profile checks out.
Contracting via a limited company (PSC)
One instance where Vida Homeloans isn’t competitive is for day rate contractors who utilise a limited company (PSC) payment structure. The lender doesn’t utilise PSC contractors’ day rates to assess affordability. Instead, underwriters treat them as self-employed, relying on SA302s and accounts to work out affordability. As you can see above, their umbrella policy is far more beneficial.
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Fixed-term, employed contractor criteria
The criteria for fixed-term contractors is super straightforward. The lender has no restriction on industry or income.
The contractor must have 12 months’ history in the same industry. Their contract must have at least three months left to run. Failing that, the contractor must provide evidence of a contract renewal/extension.
To verify their income, fixed-term contractors must provide their last three payslips.
Other types of contractors
CIS contractors
Vida Homeloans treats CIS contractors as self-employed. So, CIS applicants must have at least 12 months’ track record as a CIS contractor.
To evidence income, CIS contractors must provide:
- Their last SA302 and Tax Year Overview, or
- 12 months’ salary slips/invoices to corroborate SA302 amount
Qualifying borrowers can then access any tier of LTV Vida is offering at that time. This includes Vida’s 3 & Easy range (3% deposit mortgage range), providing the contractor’s credit profile checks out.
Zero-hours contractors and bank work
Vida Homeloans does welcome zero-hours contractors from any industry, and sees most enquiries from nurses and carers.
To qualify, contractors must have a 12-month track record in that role.
To evidence income, applicants must provide:
- Their last three months’ payslips
- Their last P60
Underwriters may ask for evidence of their track record if the P60 doesn’t highlight their work history clearly enough.
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Key points to note about Vida Homeloans
Vida Homeloans will treat you as self-employed, thus require your last SA302 and Tax Year Overview, if you:
- Are a freelance worker, such as a photographer, model, or actor
- Work on multiple or simultaneous contracts throughout the year
Similarly, if you’re a professional contractor and work on more than one contract, Vida will treat you as self-employed. You’ll need to provide your last SA302 and Tax Year Overview, or accounts if you’re a limited company contractor.
Vida Homeloans put a high price on income sustainability. If you’re a contractor whose income has increased significantly, underwriters may ask further questions about the circumstances. Or, they may restrict borrowing if they’re not satisfied with the outcome.
For all contractor types, their contract must always have the start date, end date, the contracted hours/days per week, and be signed by both the ‘employer’ and the contractor.
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.
Vida Homeloans in a nutshell
VIDA Homeloans is a specialist mortgage lender focused on helping clients whose circumstances fall outside traditional lending criteria.
Known for its flexible approach and willingness to consider more complex cases, VIDA is particularly strong when working with contractors, borrowers with adverse credit, and portfolio landlords.
To begin your enquiry, talk to our experienced advisors today.
Accreditation & recognition
Freelancer Financials is a multiple award-winning brand of Mortgage Quest Ltd.
You can find details of our FCA accreditation here.
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