7 Nov 2022
There are extra criteria points that lenders set out for contractors when applying for a mortgage. One of these with most lenders is gaps in contracts in the previous 12-24 months.
When a lender is assessing a mortgage application for a contractor, something they are looking for is continuity in contracts. Most lenders will have set criteria around length of time out of contract or employment. Generally, most lenders stick to a maximum of a 6-week gap in contracts in the previous 12 months (from date of mortgage application). This allows for time between roles such as a holiday or waiting for the new contract to start.
Some of the mainstream lenders are very strict around gaps in contracts and will often not be flexible about the length of gap unless there’s a one-off event or life event such as maternity leave, paternity leave or a bereavement.
This isn’t the case with all lenders, and some can be very flexible. Several lenders will overlook gaps or even ignore them all together. This often depends on the length of time out of contract or the reason behind the gap. We often find contractors take a break between contracts after a particularly long project, this is something we can overcome providing that significant debts haven’t been built up over that period of time and the contractor is now back in contract (or due to start one shortly).
Something that helps get around a gap in contracts is evidencing the experience the contractor has within their industry. Industry experience is important with a contractor mortgage, this gives the lender confidence that the contracting income is sustainable moving forward.
We have worked with thousands of contractors over the past 8 years and have extensive knowledge of the contractor mortgage market. If you are looking for a mortgage as a contractor, contact us today.
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