Difficulty Getting A Contractor Mortgage?

With the huge variety of payroll options open to contractors what you’d think would be a simple task, getting a mortgage, can in fact turn into a nightmare. The trouble is that there aren’t too many mortgage specialists out there that understand the nature of the payroll services that contractors can take advantage off and choosing the wrong mortgage advisor can have a knock on effect that impacts every other mortgage application you make from that point onwards.
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Is Your Salary Safe?

There is no hiding the fact that the worlds financial markets are in turmoil. There is little if any faith in the banking system with banks even unwilling to lend to each other! In this volatile environment banks have and will go under. In other circumstances some governments will step into to stop this happening. Unfortunately if you are paid via an offshore company this is where the weakness in the banking system can be revealed.

The trouble is that many of the offshore banks although subsidiaries of the larger brand are not actually the same bank as what would be saved by for example by the UK Government. The depositors guarantee scheme operated by the UK government does not stretch to the offshore jurisdictions such as the Isle of Man , Jersey and Guernsey. There is also the matter of what types of account are covered by any local scheme (if any) that may be in place. The whole subject has really come to the for in the last week with the collapse of 2 Icelandic offshore banks (Landsbanki Guernsey and Kaupthing Singer & Friedlander (Isle of Man) ) which have left thousands of depositors out of pocket with little or no chance of any recourse. Millions of pounds worth of deposits have gone. The fact is that offshore finance centres do not have the GDP or financial clout to save a bank that is going under. The scale of the deposits in the UK’s offshore centres is scary compared to just how little money the actual governments have. So whilst they offer great tax saving prospects when times are good economies of scale dictate that the risks are higher when things aren’t so good, like right now!

The state of the world economy is unsure at the moment and whilst banking shouldn’t be about a risk/reward balance the truth is that right now it is! If you’re being paid from offshore then isn’t it time you found out who your company is banking with and just how safe your salary is?

Independent Contractor Mortgage?

It’s no big secret, it’s something that faces us every morning as we turn on the news! The UK is in the middle of a credit crunch, a financial situation (or set of circumstances) that has resulted in the major lenders, including mortgage lenders being extremely strict with regard to whom they are and are not prepared to lend money to. Whilst this bad news for most people, it makes life even more difficult if you are an independent contractor looking for a mortgage.

Difficulties With An Independent Contractor Mortgage

The financial status of the independent contractor has always been difficult to explain to banks. In a banks day to day business, when it comes to assessing lending criteria and eligibility they are much more familiar with dealing with employees. Whilst it makes no sense at all that those who work for themselves are seen as a bigger risk than those who are simply paid by somebody else it is something that I’ve personally experienced, it does happen. Whilst there is always the need to prove affordability to lenders, just the complexities of HOW you are paid as an independent contractor can be enough to put of some mortgage lenders. For independent contractors who may be being paid via companies or structures that banks are not overly familiar with securing a mortgage can become a lottery.

An Independent Contractor Mortgage Solution

Aware of this contractor mortgage problem a solution has now been made available. UK mortgage brokerage firm Mortgages Made Easy Limited have created an additional service, Contractor Mortgages Made Easy. Rather than dealing direct you will have a contractor specialist mortgage adviser and a member of the contractor client services division to look after your mortgage application from start to finish. These professionals understand the various remuneration structures that contractors can operate within. This avoids the frustration of you having to try to explain to other brokers and lending institutions of how you get paid, only for them not to fully understand and waste your valuable time. Time when you could be earning money.

If you are an independent contractor looking for a mortgage then Contractor Mortgages Made Easy will be able to help you!

The Tax Advantage

Unfortunately due to recent HMRC changes we can no longer offer offshore partnerships, however we now offer one of the most cost effective EBT schemes on the market for contractors.

If your current payment scheme is being closed or even if your current provider is in the process of switching to EBT please ask us before signing up, our fees are lower than most!

For further information about contracting with The Tax Advantage and to take advantage of a free consultation please visit The Tax Advantage website.