How to Prove Your Income as a Contractor for a Mortgage
How to Prove Your Income as a Contractor for a Mortgage
Blog Article
Why Proving Your Income is Key
As a contractor, proving your income can be more complicated than it is for salaried employees. Traditional lenders often prefer steady, predictable earnings, but contractors may not have the same financial consistency. That’s why knowing how to present your income correctly is crucial when applying for a mortgage.
Key Documents You'll Need
To prove your income as a contractor, you'll typically need to provide the following documents:
Current Contract – This shows your day rate or hourly rate.
Bank Statements – Recent bank statements demonstrating regular payments.
Tax Documents – Documents like your SA302 tax return or proof of earnings from HMRC.
CV/Portfolio – A copy of your CV to show your contracting history and experience.
These documents help lenders understand your income levels and contracting stability.
The Importance of Specialist Lenders
Not all lenders understand the unique nature of contracting. Many traditional banks will reject contractors, simply because they don’t have the standard documentation that salaried employees can provide. This is where a specialist contractor mortgage broker can help. They know which lenders will accept alternative income proofs like contract rates and can match you to the right mortgage product.
What Lenders Look For
Lenders typically look for contractors who have been working for at least 12 months in the same industry or role. However, some lenders accept applications from contractors with less than 6 months of experience, especially if you’ve been in the same industry for years.
Conclusion
Proving your income as a contractor can seem tricky, but with the right documents and expert advice, you can successfully navigate the mortgage application process. Working with a contractor mortgage broker can help ensure you get the best possible deal.
Need assistance? At Contractor Mortgage Solutions, we specialize in helping contractors prove their income and secure the best mortgage options available.