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Aldermore has expanded its mortgage proposition from today to accommodate self-employed contractors that work via a limited company or sole trader, enabling them to be assessed for affordability on an employed basis using gross income.

Prospective buyers need to have either 12 months’ history as a contractor or 24 months in the same line of work, providing there are two months remaining or a renewal agreed. Income for contractors will be determined based on the day or hourly rate of their current contract, multiplied across 46 weeks.

With Aldermore already offering a diverse range of products for self-employed customers, this is another step to support brokers and more of their clients. All contractors will have access to Aldermore’s standard mortgage products, 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 [FTC]). As an added benefit, the lender has a range of adverse criteria that can be considered for contractors who may need further flexibility.

This follows the recent expansion of Aldermore’s owner occupier range, designed to serve the underserved including first time buyers, the self-employed and those with less than perfect credit histories.

Jon Cooper, director of mortgages, comments:

“We know homebuyers have more varied and complex circumstances than ever before, especially those who are self-employed contractors. 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.”

Key criteria points:

  • Affordability assessment for “one-man band” self-employed company directors and sole traders can now be calculated using gross income on an employed basis.
  • Hourly, daily or weekly rate on latest contract can be used to calculate annual income for underwriting purposes.
  • Lending criteria will be extended to allow all Fixed Term contractors to be assessed as employed, in addition to those employed via an umbrella company.
  • Proposition will focus on flexibility of underwriter decision-making, allowing Aldermore to consider different employment types in history, longer gaps in contracts, up to two contracts being worked at the same time, and “day one” contractors.

Key criteria for self-employed day rate contractors:

  • 12 months’ contractor history required or 24 months in the same line of work
  • Two months remaining on contract or renewal agreed
  • No additional contractor minimum income required (standard £10k applicable)
  • Whilst company owners must be 100% shareholders, we will accept where spouse / partner is other shareholder and joint applicant.

 

ENDS


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