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Five freelance mortgage myths debunked

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Mortgages can be a tricky thing to understand when you’re a freelancer; there seems to be a lot of Chinese whispers when it comes to the obstacles you’ll face. We’re here to debunk them for you.

While we’re here, we also want to let you know that we’ve got a mortgage webinar coming up on September 27th. If you’ve got any questions or concerns that we don’t debunk here, come along and get your questions answered!

With all that in mind, let’s explore the five biggest myths that freelancers wrongly believe apply to them when talking about getting a mortgage.

Mortgage Myth 1: Freelancers need to have three years of accounts to get a mortgage

Contrary to popular belief, freelancers can actually get a mortgage based on as little as one-year’s self-employed trading. It depends on who you talk to really - thankfully, Crunch works closely with contractor-friendly lenders which enables us to arrange a mortgage based on your earnings.

Mortgage Myth 2: Freelancers need to have a regular monthly income

It doesn’t matter whether you’re invoicing every week or only every few months. It doesn’t even matter if there are times when you’re between clients. The lenders we work with understand that self-employment is different from permanent employment. So they’re not expecting to see consistent regular payments. As in Myth one above they are more concerned about your annual income and whether you can afford repayments

Mortgage Myth 3: Freelancers are labelled as high risk by banks and building societies when it comes to getting a mortgage

Where did this one even come from? Fear not - a freelancer will be assessed in the same way as an employee; your credit status, your earnings and affordability. Your self-employed status won’t hold you back.

Mortgage Myth 4: Freelancers need a large deposit

Again, there’s no reason that simply being a freelancer means you need a larger deposit, you’ll be treated just the same as anyone else. Of course, having a large deposit will mean you represent less of a risk for mortgage lenders, and it’s natural to expect a more competitive mortgage deal with a bigger deposit. However, you can put down as little as 5% and still be positively assessed for a mortgage.

Mortgage Myth 5: Lenders charge freelancers a higher mortgage rate than permanent employees

On the contrary, as a freelancer, you may even receive lower mortgage rates if you’re in a better position to put more savings aside and can provide a larger deposit.

Freelancer Mortgages Webinar

If you’re looking for more reassurance, on 27th September, we’re hosting a special webinar all about freelancer and contractor mortgages, and you’re invited! Our webinar can help:

  • Limited companies in the private and public sector
  • People who’ve been freelancing less than a year
  • People who’ve just gone freelance
  • Day-rate freelancers with specific day/hourly rates
  • People on multiple contracts
  • People with open-ended contracts and contracts of any duration - whether it’s weekly, three months, six months, rolling contracts.

There’ll also be a Q&A session to answer any lingering questions you may have. So join the Crunch mortgage webinar on 27th September – it could be the first step on the road to your perfect mortgage.

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