Exclusive mortgage offers for Danbro clients
Thanks to our recently launched partnership with the IFAs at ContractorFinancials we are pleased to offer our clients access to specialist financial planning advice tailored to your status as a Contractor.
Every month the advisers will cover an area of interest to Freelancers in our newsletter and with the housing market moving once again, this month they are focusing on the special mortgage underwriting and exclusive schemes that they are able to offer.
Emma Chainey at ContractorFinancials writes
Over the past 12 years of offering specialist mortgage advice to Contractors we have built up an enviable reputation amongst Freelancers and Lenders alike for the professional service that we offer. We base mortgages purely on your contract rate rather than taxable pay and thanks to the high profile in the mortgage market we are regularly offered exclusive mortgage schemes by lenders; with the most recent being a 2.59% two year offset deal from Clydesdale Bank.
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For a month we have been one of only 6 brokers in the whole of the UK to have access to this scheme and as the only Contractor orientated advisers to be chosen by the lender we have continued our policy of never charging Danbro clients the normal broker fees that you would ordinarily pay to secure a mortgage.
Contract based underwriting
In common with the other lenders that we have negotiated special underwriting with, Clydesdale now fully accept the unique nature of your employment status and so when a client is introduced by us they will lend based on a simple multiple of your contract rate alone. This means that we don’t need to fall back on your payslips or accounts, which in any case won’t fully reflect your true earnings. This special underwriting means that it’s very likely that you’ll be able to secure a larger mortgage than when you were permanently employed and can do so without suffering any higher an interest rate as a result of your contractor status
Computer doesn’t say no...
As many Contractors have found, a small glitch in your credit history could have disastrous implications for your mortgage application as, post credit crunch, lenders have become very strict with their criteria. However, unlike most lenders, Clydesdale Bank in particular will consider each application we make as an individual rather than an input in some vast industrialised process. They don’t just use a standard credit profiler; they will consider the reasons why you have certain problems in your past and deal with them on an individual basis.
This was particularly useful for a recent Freelancer client of ours that had moved current account providers and had two missed credit card payments with separate companies that weren’t his fault. Ordinarily, a lender would see this and immediately refuse the application, however we explained the situation to Clydesdale and they therefore agreed to lend to the client after all.
An offset mortgage – perfectly suited to your freelancer status
If you have savings or leave a balance on your current account each month then you could really benefit from getting these funds properly working for you with an offset mortgage. The level of any mortgage debt that you pay interest on can effectively be reduced by any balance you hold on a linked credit account. You only pay interest on the difference between the two and this enables you to potentially reduce the term of your mortgage very substantially.
This type of scheme is particularly useful for contractors who will have a varying amount of money in their account over the course of a year but probably won’t be happy paying off a large sum that cannot then be withdrawn in an emergency/time between contracts etc.
Offset mortgages can also be used as a very effective tax planning tool by Contractors. Instead of paying 20% or 40% income tax on savings interest in an ordinary account, you pay no tax because offset ‘returns’ are classed as avoiding interest on debt. If you pay higher rate tax then you could benefit from an effective rate of risk free investment return of 8% which compares very favourably with a pension or ISA.
You can put up to four people on the Clydesdale offset mortgage which makes it perfect for buying with friends or for parents helping their children to get on the ladder. Your Clydesdale mortgage couldn’t be easier to manage, with a very effective and user friendly online banking system.
To find out more about these schemes or other options based on smaller deposits or available even within the first week of your first contract the next step is to contact our specialist mortgage advisers. It is often the case that Contractors are turned away when they approach a lender direct because inexperienced call centre/branch staff who don’t understand your Contractor status. However, we have used our experience to build strong relationships with key decision makers in these same lenders to ensure that we can arrange your mortgage using our special contract based underwriting. Not only do you save the hassle of hunting up and down the high street but you can also rest assured that we will handle the whole process for you, chasing the lenders and solicitors so you don’t have to.
To benefit from our exclusive Contractor rates call on 01253 600140 or email email@example.com.