Contracting and Mortgages

[Bad Bob 10]

I currently have a mortgage with first direct and I work permanent.

However, in a couple of years I'm thinking of going self employed as a contractor. What effect would that have on my mortgage?

 

Would I have to declare a change in the way I get my earnings, will I have to negotiate a different mortgage type?

[Steve Davies 10]

You could always try Googling for contractor mortgages. There's plenty of specialist companies. I'm sure they'd tell you whether you needed to switch or not.

[Bad Bob 10]

Thanks, just had a look and come across these guys

http://www.contractormortgagesuk.com/

 

Their offset mortgage is better than the one I have with first direct as a permie.

[Steve Davies 10]

Happy to help buddy!

[Thorpes 10]

Their offset mortgage is better than the one I have with first direct as a permie.

 

Most contracting is done through limited companies, nearly all contracts in the IT industry insist on it. As a limited company is a separate legal entity to the individual offset mortgages are not as effective as they are for the self employed.

[MeganPlumme 10]

We just went through the same thing. I have a stable job and my wife is a freelance designer. Despite her being employed every working day for a year they would not take her salary into consideration, the the mortgage was solely based on mine and it was touch and go as I had recently taken a company car instead of allowance!!!

[Cyclone 10]

I currently have a mortgage with first direct and I work permanent.

However, in a couple of years I'm thinking of going self employed as a contractor. What effect would that have on my mortgage?

 

Would I have to declare a change in the way I get my earnings, will I have to negotiate a different mortgage type?

I don't think you're obliged to declare it, but if you have payment protection then it might invalidate it. Other than that, as long as you keep paying I don't think you need to tell them, or that they would care.

 

---------- Post added 27-12-2012 at 11:14 ----------

 

Most contracting is done through limited companies, nearly all contracts in the IT industry insist on it. As a limited company is a separate legal entity to the individual offset mortgages are not as effective as they are for the self employed.

 

Indeed, it could be quite dodgy to use money in the company account to offset interest from a personal mortgage, at best it's a taxable benefit, at worst it would be misappropriation of company funds.

 

I moved from permie to contract (through a ltd company) 5 years ago, I didn't inform my mortgage provider at the time, and they didn't have any problem when I wrote them a large cheque to pay it off a few years later.

 

---------- Post added 27-12-2012 at 11:15 ----------

 

We just went through the same thing. I have a stable job and my wife is a freelance designer. Despite her being employed every working day for a year they would not take her salary into consideration, the the mortgage was solely based on mine and it was touch and go as I had recently taken a company car instead of allowance!!!

 

Getting a new mortgage as a contractor would normally require 3+ years of accounts.

[Chez2 10]

Have I missed something? I can't see where the OP siad he would use company money to offset personal mortgage. There are guidleines about a company (your own business) loaning money to you with relevant interest rates etc.

[Cyclone 10]

There are indeed, but it's almost certainly not worth it.