"Taking the time to learn more about your client’s experience and future prospects at the outset can help you to identify the best lender for their circumstances "
Lenders are becoming more flexible in the way they underwrite applications from contractors, and it is often possible to secure a mortgage for a client who has less than 12 months trading history.
But context is everything. Lenders are able to be flexible, but they also have a responsibility to ensure that mortgages are affordable and sustainable, and will want to establish an understanding about how your client earns their income.
Taking the time to learn more about your client’s experience and future prospects at the outset can help you to identify the best lender for their circumstances and will also facilitate a smoother underwriting process once you have submitted an application. So what questions do you need to ask?
If your client has less than 12 months’ track record working as a contractor, you need to find out whether they have a more significant track record of working in the industry within which they are contracting. Some lenders are able to consider applicants in these circumstances but only if it is reasonable to assume that they have realistic prospects of earning a sustainable income and this means establishing whether they are likely to have the right experience and network in place to generate work. As part of this sense check, underwriters are also likely to ask:
• Is the applicant’s day rate realistic given the industry they work in?
• Does the applicant have skills and experience that are considered portable and in demand?
• Is the applicant employed within an industry where temporary or short-term contracts are common?
• Is the applicant employed at a senior level where transferring industries due to specialised skills is common?
By finding out this information at the outset, you can put some context around your client’s contractual employment and develop a better understanding of their circumstances. This will help you to identify the right product and lender for their circumstances and help the lender to deliver a smoother underwriting experience, which will ultimately lead to a better experience for your client.