Lenders want proof of fixed income and the ability to repay the mortgage, which is sometimes difficult for contractors because contractors’ incomes can fluctuate. Therefore, it can be difficult for many contractors to get a remortgage due to their job insecurity.
Finding a contractor-friendly lender is also one of the contractors’ key steps to getting a remortgage at the right rate and terms. Before applying for a remortgage, contractors need to know how lenders evaluate contractors and try to find a contractor-friendly lender.
Contractors must plan to apply for a remortgage, and this not only speeds up the application process. But also increases the chances of the lender accepting them. By doing the following, the chances of accepting contractors increase and help make the remortgage process easier for them.
What Are The Factors Affecting Contractors’ Remortgages?
Here are some tips to help contractors to get remortgages.
Choose a contractor remortgage specialist
1.1. Finding a Contractor-Friendly Lenders – Part of the problem with getting a remortgage is the variety of contractor businesses. Contractors operate in various contexts, including limited companies, umbrella companies and sole traders. This is one of the main reasons banks and lenders are reluctant to repay their contractor remortgages. Lenders are largely unfamiliar with the contracting industry and the various methods of paying contractors and self-employed businesses, so it is wise to seek the help of a specialist to get a remortgage.
1.2. Considering the Needs and Conditions of Contractors – Lenders have a special underwriting process specifically designed for these mortgages. Contractor remortgage broker work with contractor-friendly lenders to help contractors find remortgages tailored to their needs and lifestyle.
1.3. Accelerate the remortgage process – Brokers understand the market comprehensively and know which lenders offer products relevant to the contractors’ circumstances. This can eliminate the hassle of finding a lender and speed up the application process for contractors.
1.4. Updating and Preparing Documents – To get a remortgage, contractors must show bank statements to prove their income, but contractors may need to provide more documents. But brokers explain to contractors exactly what is needed. Contractors should update and prepare their documentation to expedite the application process. The more evidence the contractors have, the stronger their application will be and the better their chances of getting a remortgage.
1.5. Ensuring the financial health of contractors – An experienced broker in re-contracting while ensuring that the financial health of contractors helps contractors prepare for the complex remortgage process.
Improve credit score
It is no secret that credit scores play an important role in getting a remortgage. The better the credit score of the contractors, the more likely they are to get a competitive remortgage at better rates and conditions.
Plan to increase the deposit amount
Lenders typically charge 10% to 25% of the deposit for contractors. Therefore, contractors should consider this factor when planning their finances when preparing to buy a property. Paying more deposits will make it easier for contractors to repay the mortgage in the long run, reducing their risk to the lender. Having a larger deposit also increases the likelihood of getting a lower rate remortgage.
Estimate the monthly amount and plan for the future
Even if a borrower can pay the instalment more than expected, it should be realistic, and what can be paid as a monthly payments should be evaluated. For example, limited companies’ financial obligations, such as VAT and corporate taxes, and other financial matters should be considered.
Explore ways to maximize income
Due to the fluctuations caused by the outbreak of Covid 19, the housing market has also fluctuated a lot. So contractors need to look for ways to maximize their income to cover unforeseen expenses and gain more opportunities to get a remortgage.
Advantage of Using AWS Mortgages Service
Getting a remortgage can be a daunting task, but AWS Mortgages advisors do not think that just because you are a contractor will make you more stressed about getting a remortgage. AWS Mortgage advisors know that these stricter lending criteria stem from misunderstanding contractors’ income structures. So with the help of AWS Mortgage expert advisors, you can find the right remortgage for you.
AWS Mortgage advisors know that a wide range of contractors can make a comprehensive comparison of remortgages on the market for you. Through years of experience in various specialized fields and building relationships with large lenders, they can do this.