Getting a mortgage as a self-employed contractor is difficult. But you can significantly boost your chances of success by involving a seasoned broker who specializes in securing mortgages for contractors like you.
Most lenders readily grant contractor mortgage requests made through brokers that have established long-term relationships with them and have generated huge business. They are also willing to offer special deals to such brokers.
So, involving a mortgage broker will not only help you secure a contractor mortgage quickly, but it will also help you get one with the best rates available.
Sadly, not every mortgage broker out there is worth hiring, as many of them would place their own interests above yours. So, you need to be careful to avoid landing in the wrong hands.
Asking these four vital questions will help you choose the right contractor mortgage broker.
1. How long have you been in business?
It goes without saying, but brokers who have spent longer years in business have more experience with lenders and are smarter at securing mortgages for contractors.
Although brokers who are new in the business might render excellent services as well, most lenders are more comfortable working with the experienced ones. So, the more experienced your broker is, the better your chances of success.
2. Can I get references?
If your potential broker hasn't worked for as many years as you would have loved, then you can figure out their success rate by asking for references. Collect the names and contact information of their most recent customers who are self-employed contractors and were able to secure mortgage loans. Follow up by calling those customers. Ask if they were fairly treated and if they would be glad to hire the broker's services again.
If the customers give good accounts of the broker, then that's a good sign. If some of them have repeatedly secured mortgage through the same broker, that's a better sign.
3. What are the costs and fees involved?
How brokers make money from their clients usually marks the divide between the ethical ones and the greedy, unethical ones. Typically, brokers make money from fees and yield spread premiums. Since these will come from your pocket, you have every right to know about them from the start.
So, ask to know every cost attached to getting a mortgage as a self-employed contractor. By knowing how much is expected of you, you can discuss how to lessen the cost with your broker.
4. What is my mortgage interest?
Although the lender decides how much you'll pay as interest on your mortgage, it's important to ask your broker about it, since it will account for a significant fraction of your repayment.
Ask how your interest rates will change over time. How much is the rate? Will it remain fixed? Will it reduce as your outstanding debt reduces? If the answers you get are satisfactory, that's a go-ahead sign.
When looking for the right broker for your contractor mortgage, relying on the answers to these questions will help you make the right choice. Even if you don’t know much about intricate aspects of getting a mortgage, these questions are enough to save you from the wrong broker.
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