Contractor mortgages

[Sarnie]

petop said:

Ok in a bit of a quandry. Left the Army last year (July) and worked for Company who supply Contractors to work with military since then.
Applied for a mortgage as myself and girlfriend want bigger house. My credit rating is very good, no debts what so ever and we are putting a deposit of 190k on a 460k house. Our financial advisor shopped around and got us a good deal with Santander. They asked for contract and made sure i had 6 months left of my contract and had worked 6 months. All good they said.
Meanwhile, found a house, we have a buyer for ours and all is good.
Then 2 days ago i get a email of advisor saying that Santander have "looked at the small print" and noticed that the way my contract is made out it im self-employed as i could bring on 3rd parties to help with my work. Now being in Afghanistan that just cant happen. I get a montly salary, no tax to pay, medical insurance off the company etc etc. I have sent a letter to Santander through my advisor who is trying to persuade them that im not self-employed etc. Hopefully it will go ok and ill find out in the next few days.
My advisor said if the Santander thing falls through there is another way but he is waiting out first.
I dont want to have this all fall through because of someone's interpretation of a contract which actually has no bearing to how im employed out here.
Any ideas or is there anyone else who looks favourably on contractors, especially ones that work abroad.
Thanks in advance.

I'm a Broker if you need any help with this.

As per the post above, have you set up a Limited Company and pay yourself a salary plus dividend? Or are you a sole trader with a contract direct with the company you work for?

If you have set up a Ltd company then most lenders will automatically lump you into the self-employed category and therefore require at least two years SA302's etc...

[essayer]

Sarnie is the expert, but I'd have thought you should have been ok with a healthy LTV like that, even self employed? Good luck

[Sarnie]

essayer said:

Sarnie is the expert, but I'd have thought you should have been ok with a healthy LTV like that, even self employed? Good luck

Nope, he'll struggle with any lender who deems him to be self employed as they will revert to the self employed criteria which almost across the board is a minimum of two years trading history.

This application is a Contractor specific case, which is why I'm surprised that it's been placed with Santander and not surprised it's ran into difficulties.

OP, hope it gets sorted, feel free to PM if it looks like Santander aren't going to play ball!

[petop]

Thanks for the replies. I wondered about setting up as a Ltd Company but didnt in the end which by the sounds of it was a good idea. I submit my time sheet back to Luxembourg each month then the following month im paid that months wages. Ill see what comes of my advisor, if not good then ill sending some PM's as my girlfriend is having kittens at the moment over all this and being out here can be a pain. This is why i had all this in order when i was last home, or so i thought!

[Sarnie]

petop said:

Thanks for the replies. I wondered about setting up as a Ltd Company but didnt in the end which by the sounds of it was a good idea. I submit my time sheet back to Luxembourg each month then the following month im paid that months wages. Ill see what comes of my advisor, if not good then ill sending some PM's as my girlfriend is having kittens at the moment over all this and being out here can be a pain. This is why i had all this in order when i was last home, or so i thought!

The Ltd company set up makes good sense........but from a mortgage lending point of view it poses problems for the first two years.

[petop]

Sarnie, you have mail.

[jonnydm]

For those who are contractors but paid through PAYE by the company / agency, where do they stand in such a case?

I've been offered this set up before but turned down because Ltd offers better terms and potentially better money.

[petop]

Well good news today. Santander came back and accepted the appeal classifying me as an contracted employee and not self employed. So new house move hopefully Aug......while im still out in Afghanistan. I will be giving support to the missus from afar "only a few boxes more love"!!

[MagicalTrevor]

Just as another for Sarnie. My mortgage was all approved yesterday.

Just over 1 year as a contractor, based on my day rate and with a rate that I'm happy with. Due to various circumstances I did it all via email!

Thanks mate, you did a good job there. Highly recommended.

[CRB14]

MagicalTrevor said:

Just as another for Sarnie. My mortgage was all approved yesterday.

Just over 1 year as a contractor, based on my day rate and with a rate that I'm happy with. Due to various circumstances I did it all via email!

Thanks mate, you did a good job there. Highly recommended.

As I'm in a similar situation could I ask the multiplication of day rate that was used? Also what sort of deposits were required?

[Sarnie]

MagicalTrevor said:

Just as another for Sarnie. My mortgage was all approved yesterday.

Just over 1 year as a contractor, based on my day rate and with a rate that I'm happy with. Due to various circumstances I did it all via email!

Thanks mate, you did a good job there. Highly recommended.

Andrew,

Many thanks, pleased it went through so quickly!

[Sarnie]

CRB14 said:

As I'm in a similar situation could I ask the multiplication of day rate that was used? Also what sort of deposits were required?

A general rule of thumb is;

Day rate x 5 x 48 = Earnings used for Affordability.