Singing in the Rain

For Contractors, it is not just the beautiful English weather at this time of year that requires the use of an umbrella. They are though, rather complex and difficult to understand; particularly for mortgage purposes. You see, your average high street lender likes people who are employed. They have a fairly obvious salary that they receive net of tax every month, in twelve nice easy instalments, and everybody knows where they stand. At a push, they’re pretty fond of sole-traders too. They run their own business but pay their tax themselves. They can work with that. But what about Contractors? Mention the words ‘limited’ and ‘company’ to any lender and they will hear self-employed.

Not ideal, but at least they begin to understand the workings. Mention the word ‘umbrella’ however, and they start to look out of the window. Lenders find it difficult to understand just why an umbrella company serves such an important purpose. To contractors of course, they really can be an integral – and much more straightforward – route to receiving their day rate. The time that it can take to differentiate between what constitutes expenses and what doesn’t, and how to reclaim those costs, is time that really is better spent working for a contractor. And thus, we have a problem.

Contractors see the importance, and assume that lenders realise this too; but lenders simply haven’t got a clue.

So what to do? Where to turn?

Contractor Mortgages Made Easy deal with many clients on a daily basis who have tried – and failed – to obtain mortgage funding while working through various umbrella companies, and not only does this impair their ability to obtain future mortgage funding, but it can potentially damage a key relationship – that between a contractor and an umbrella company. Thinking that they must simply be employed, lenders are quick to write to the umbrella company for an employer’s reference. All well and good if you’re happy to provide one, but they will still ignore those expenses.

Worst case, it can damage (or even terminate) the working relationship between umbrella and contractor, as companies don’t want the hassle of having to provide this kind of administration. And this is where a contractor-specialist mortgage broker comes in. We understand how – and more importantly why – this system works, and can get past the normal fiscal red-tape to ensure that clients are able to utilise all of their income, in a way that is hassle-free.

We can ensure that your contract value is assessed in exactly the same way as a permanent employee – without the hassle to you. For more information please contact Mark McBurney on 01489 556125 or via email

Article courtesy of Contractor Mortgages Made Easy.

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