If you need a contractor mortgages, and subject to Terms & Conditions, NatWest could be one option that we, as a whole of market mortgage broker, could consider dependant on your personal circumstances, although you will need a minimum income of £75,000 per annum. NatWest says that in order to reduce risk, it requires plenty of evidence of a solid income stream in the past, now, and in the future. However, if you meet these criteria, NatWest can provide a contractor mortgage on competitive terms.
What criteria is a NatWest contractor mortgage assessed under?
For PAYE contract workers, NatWest requires one year’s evidence of history of earnings. This could take the form of two six-month contracts or four three-month contracts. The lender also wants to see evidence of a contract in place for a minimum of a further three to six months.
For self-employed contractors earning more than £75,000 per annum, NatWest will calculate your income as your average weekly contract income multiplied by 46, providing you can provide evidence of the following:
• Last three months’ consecutive personal bank statements (although this is not necessary if your main account is with NatWest or RBS) • If you have significant business expenses – three months’ consecutive bank statements (personal or business) detailing these • A copy of your contract, encompassing 12 months, with a minimum of six months’ contract(s) already completed immediately preceding the date of application • You have taken no more than a six-week break between contracts in that 12-month period • Your tax position is paid and up to date.
If you are a day-rate self-employed contractor operating via a limited company, then NatWest may also be able to lend to you as long as you are a single applicant owning 100 per cent of the company, or it is a joint application where one of the applicants owns 100 per cent of the company. Also allowed is a joint application where the company is jointly owned, or a joint application where one applicant owns 100 per cent of the company and the other applicant is employed by the company. However, in the latter case, the employed applicant’s income should be excluded to avoid double-counting.
If you have significant business expenses which are not reimbursed as part of your contract, they must be fully understood, evidenced and accounted for. These may include car/finance loans; extended travel and accommodation costs; training courses; professional indemnity insurance and partner/spouse salaries.
How AWS can help
AWS helps many day-rate contractors find the right mortgage for their circumstance on competitive terms. We are whole-of-market brokers and we have a good understanding of contractor mortgages. Please get in touch for more information.