Barclays Bank is renowned for offering attractive interest rates and is a prominent lender in the market. However, due to their high demand, arranging an appointment with a Barclays Mortgage Advisor can take some time.
While Barclays often indicates a willingness to assist with contractor mortgages, currently, they are not equipped to provide this specific service. The traditional personal relationship with a high street bank manager, who once had the discretion to make decisions based on individual merit, has become a thing of the past. Now, decisions are largely driven by automated processes. This is not just a Barclays phenomenon but a common trend among most lenders.
Regardless of whether you’re a premier customer at Barclays, they do not currently offer mortgages to contractors. This makes navigating Barclays Contractor Mortgages particularly challenging. Expert advice from our team is essential to ensure you approach this correctly and explore the best possible options for your mortgage needs.
Barclays Contractor Mortgage
Barclays Contractor Mortgage is an attractive option for contractors looking for flexible home loans. Barclays Bank is well-known for offering competitive interest rates and is a leading lender in the market. However, due to high demand, getting an appointment with a Barclays Mortgage Advisor can take a bit of time.
While Barclays often shows an interest in helping contractors, at the moment, they aren’t providing this specific service. The old days of having a personal relationship with your bank manager, who could make decisions based on your unique situation, are gone.
Now, decisions are mostly automated, which is the case with many lenders. So, it’s important to seek expert advice to make sure you’re exploring all your options properly.
Current Mortgage Options for Contractors
Barclays offers several appealing features for contractors, including:
Increased Loan to Value (LTV)
Brokers can now calculate affordability based on the day rate up to 90% LTV, a significant improvement from the previous 85% cap. This allows contractors to borrow more with a smaller deposit.
Multiple Shareholders
If you’re running a limited company with a partner, both shareholders can now be named on the mortgage application. Previously, only one shareholder was allowed, making it difficult for couples in business together to secure a mortgage.
Multiple Contracts Allowed
Contractors can now have more than one contract, with a work cap of 48 hours per week. This is a positive change from the old rule, which limited borrowers to just one contract.
Understanding the Application Process
The process of securing a mortgage can be more complex for contractors, but Mortgage Knight is here to help. We understand the specific requirements Barclays has for contractor applications:
Contract Requirements
- Minimum Income: You’ll need to show a minimum annual income of £50,000, which translates to a day rate of around £217.39.
- Consistent Earnings: While short gaps between contracts are allowed, Barclays prefers a consistent work history to assess your application.
Documentation Needed
Barclays requires different documents depending on your employment structure:
- Limited Company Contractors:
- Last three months of business and personal bank statements.
- Proof of a 12-month contract or two contracts if they are shorter.
- Umbrella Contractors:
- Personal bank statements and pay slips from the past three months.
- PAYE Contractors:
- Submit your contract and evidence of consistent employment.
Adverse Credit Considerations
Barclays has strict rules regarding credit history. You won’t be eligible if you’ve had an Individual Voluntary Arrangement (IVA), Debt Relief Order, or filed for bankruptcy in the last six years. It’s crucial to maintain a strong credit score to improve your chances of approval.
Added Perks for Barclays Mortgage Borrowers
Last month, Barclays partnered with British Gas to offer discounted energy-efficiency checks to their mortgage customers. This initiative not only helps you save on energy costs but also increases your property’s value and appeal.
Why Choose Barclays?
Barclays is a top choice for contractors because they genuinely understand the unique income structures in this sector. Their mortgage products are designed to accommodate fluctuating incomes, making it easier for contractors to secure the loan they need. Whether you’re a first-time buyer, looking to remortgage, or interested in an investment property, Barclays offers a range of flexible options.
How Mortgage Knight Can Help
Applying for a contractor mortgage can be daunting, but that’s where we come in. At Mortgage Knight, we work closely with Barclays’ senior underwriters to streamline your application process. Our experience ensures your application is submitted accurately, often resulting in a mortgage in principle within 24 hours. The entire process typically takes about three days, with completion in two to four weeks.
