Skipton Building Society has developed mortgage products that accommodate the unique income structures of contractors. Instead of relying on tax returns or lengthy self-employment records, Skipton considers contract rates to calculate affordability, providing contractors with fairer mortgage terms.
Traditional lenders often demand long tax histories and financial statements from contractors. Skipton, however, evaluates contractor income based on the daily contract rate, providing a straightforward and transparent picture of potential earnings.
This calculation assumes up to four weeks of downtime annually, offering a realistic income assessment that reflects the flexible nature of contract work. For contractors with more significant income gaps, Skipton may adjust this calculation accordingly.
Tip: If you’re a contractor with a high daily rate, Skipton’s method accurately reflects your earnings without requiring net profit statements or complex tax returns.
Skipton Building Society’s eligibility criteria for contractor mortgages are designed to be flexible yet thorough, balancing the unique circumstances of contract workers with a need for income consistency.
Tip: Keep records of past contracts and income statements organised and accessible, as these may be needed to verify contract history and income stability.
For contractors, Skipton Building Society offers high Loan-to-Value (LTV) options, enabling applicants to secure mortgages with smaller deposits. Here’s an outline of the available LTV options:
Example: For a new-build property priced at £200,000, a 95% LTV mortgage would cover £190,000, requiring only a £10,000 deposit. High LTV ratios allow contractors to enter the property market sooner, avoiding prolonged saving for large deposits.
Tip: Aim to save as much as possible for your deposit to increase your mortgage options and potentially secure lower interest rates.
Skipton Building Society goes beyond just flexible criteria; they offer contractor-friendly mortgage options tailored to the needs of self-employed professionals with variable incomes.
Skipton’s income assessment method, based on the daily contract rate, streamlines the process, removing the need for extensive tax returns or complex documentation, making it easier for contractors to present their earnings accurately.
With Skipton’s high LTV ratios, contractors with smaller deposits can enter the property market at a competitive rate, particularly appealing for new-build homes.
Skipton’s team understands the complexities of contractor mortgages, providing personalised support to guide applicants through the entire mortgage process, from initial inquiry to final approval.
Emma, a freelance IT contractor with a daily rate of £350, wanted to buy her first home but struggled with traditional mortgage applications due to her contract-based income.
Emma’s application was delayed with other lenders who required lengthy tax documents.
Emma aimed to buy a new-build home but needed a high LTV mortgage to fit her budget.
Skipton assessed Emma’s income based on her contract rate, accurately calculating affordability without needing detailed tax returns.
With Skipton’s 90% LTV option, Emma secured a mortgage for her new-build home, achieving her goal of homeownership.
Skipton’s contractor-friendly approach allowed Emma to overcome traditional application barriers, securing a competitive mortgage aligned with her income structure
Ensure you have at least six months of contract history and a month remaining on your current contract.
Having clear income records will streamline the application process and help Skipton assess your earnings accurately.
Skipton’s high LTV options make homeownership achievable for contractors with smaller deposits.
Mortgage Knight can provide guidance tailored to contractors, helping you connect with Skipton advisors to improve your mortgage approval chances.
Ans: Skipton calculates contractor income by multiplying the daily rate by five (working days per week) and then by 48 weeks, accommodating potential income gaps.
Ans: Skipton offers up to 95% LTV for new-build houses and 90% LTV for flats and existing properties, meaning you may need a deposit of 5-10%.
Ans: Yes, Skipton requires at least six months of contract history and a minimum of one month left on your current contract at the time of application.
Ans: Skipton reviews applications on a case-by-case basis. Demonstrating stable income and providing clear financial records can help improve your chances, even with minor credit issues.
