They can now be assessed for affordability on an employed basis using gross income
Specialist lending bank Aldermore has expanded its mortgage proposition to accommodate self-employed contractors working through a limited company, or as sole traders.
The lender, which already offers a range of products for self-employed customers, aims to support brokers and their clients with this new offering, which allows self-employed contractors to be assessed for affordability on an employed basis using gross income.
Prospective buyers must have either 12 months of history as a contractor or 24 months in the same line of work, with at least two months remaining on their contract or a renewal agreed. Contractor income will be calculated based on the day or hourly rate of their current contract, multiplied across 46 weeks.
Under Aldermore’s new affordability assessment criteria, no additional contractor minimum income required, with a standard minimum income of £10,000 applicable. Company owners must be 100% shareholders, although a spouse or partner who is a co-shareholder and joint applicant is acceptable.
Contractors will have access to Aldermore’s standard mortgage products, with loans available up to 90% loan-to-value (LTV) for self-employed contractors and up to 95% LTV for those working via an umbrella company or a fixed-term contract. The lender also offers a range of adverse criteria for contractors needing additional flexibility.
The initiative follows Aldermore’s recent expansion of its owner-occupier range, designed to assist first-time buyers, the self-employed, and those with imperfect credit histories.
“We know homebuyers have more varied and complex circumstances than ever before, especially those who are self-employed contractors,” said Jon Cooper (pictured), Aldermore’s mortgages director.
“Aldermore’s flexible approach for people who are sometimes overlooked enables us to back more customers on their individual merits and enable them to get the mortgage that’s right for them. If the loan makes good sense, we will always strive to make it work and find a solution.”
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