Exclusive mortgage offers
With unique experience in the Contractor mortgage market spanning over 12 years, our MD Tony Harris has built up an enviable reputation amongst Contractors and Lenders alike for the professional service that we offer. Thanks to this pedigree in the mortgage market we are regularly offered exclusive mortgage schemes by lenders, with our most recent being a 2.59% two year offset deal this month.
For the past month we have had access to a scheme that was offered to only 6 brokers in the whole of the UK. As the only Contractor orientated advisers to have access to this deal we were able to continue our policy of not charging clients the normal broker fees that most other advisers charge to secure this exclusive from Clydesdale Bank. Thanks to our work on behalf of Freelancers, 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 your contract rate alone.
The rates are on properties valued between £100k and £750k. They are available on a loan to value (LTV) of 60% or less so are suitable for Contractors with equity in their homes or capital saved to put down as a deposit. We believe that this same rate may soon be available at 80% LTV too.
The two year fixed rate is 3.69% until 31st May 2012 when it reverts to the Clydesdale Bank standard variable rate (SVR). If you would like to secure your rate for a longer period then they are also offering a five year fixed rate of 4.99% until 31st May 2015. As Bank of England base rate is at its lowest in 300 years, it seems inevitable that they will begin to rise in the coming year and as such these fixed rates may prove popular with Contractors who want certainty over their monthly payments.
Computer doesn’t say no…
We reported a few months ago in Planet Contractor that 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 will consider each application 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 recently 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 decided that they would lend to the client because the missed payments were not his fault.
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. Clydesdale is offering our clients a rate of 2.59% on an offset mortgage until 31st May 2012 which is a very competitive rate at the moment.
Unlike similar schemes the Clydesdale offset offers Contractors the chance to earn interest on any balance in your linked accounts that is over and above the level of your mortgage. Whilst the rate isn’t very high at the moment because of the low base rate, it is better that the balance is earning interest than gathering dust. 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 tax and risk free investment return of 8% which compares very favourably with a pension or ISA.
A flexible mortgage to suit your individual needs
Most Offsets only allow a single cheque account and several savings accounts to be linked but the Clydesdale scheme can be linked to up to six current accounts and six savings accounts and if it is a joint application then unlike other providers, you can link individual rather than just jointly held accounts to the joint mortgage. This allows you to draw on a yet bigger potential pool of savings to offset against your mortgage, which can significantly reduce the mortgage term. 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. In certain circumstances you can even offset business accounts with your mortgage.
Your Clydesdale mortgage couldn’t be easier to manage, with a very effective and user friendly online banking system. What next….
To find out more about these schemes 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 don’t understand your Contractor status. However, we have used our experience and reputation in the industry 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 our mortgage team today on 0845 062 8888 or email mortgages@contractorfinancials.com and one of our expert advisers will be in touch.
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