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Halifax Contractor Mortgages

Criteria and Lending Guidelines

In the world of contractor mortgages, understanding the specific criteria and lending guidelines set by Halifax is crucial. Halifax Contractor Mortgages presents a unique opportunity for contractors to secure financing for their dream homes. Let’s delve into the key aspects of Halifax contractor mortgages, the criteria they follow, and their lending guidelines.

Halifax Contractor Mortgages – An Introduction

Halifax, a prominent name in the UK mortgage market, offers specialized mortgage solutions tailored to the needs of contractors. These mortgages are designed to accommodate the income variations and diverse employment structures often associated with contractors.

Halifax Contractor Criteria

To be eligible for a Halifax Contractor Mortgage, contractors must meet certain criteria. Understanding these criteria is essential for those seeking this financing option:

Income Structure:

Halifax considers contractors with various income structures, including self-employed individuals, those employed via umbrella companies, and those on fixed-term or short-term contracts.

Income Verification:

The income verification process differs based on the contractor’s classification. Self-employed contractors need to provide proof of paying their own taxes, while employed contractors should have their taxes managed by their employer or an umbrella company.

Continuous Employment:

For contractors to be classified as employed, they must have either 12 months or more of continuous employment with at least 6 months remaining on their current contract.

Limited Companies:

Contractors with limited companies may face unique challenges. Only one customer’s income from the contract can be considered for mortgage affordability unless other shareholders are not named on the mortgage.

Zero Hours Contracts:

Halifax acknowledges the dynamics of zero hours contracts and considers contractors on these contracts for over 12 months. In such cases, proof of all income received in the past year is required.

Probationary Employment:

Income from probationary employment is accepted if it’s part of a permanent contract. If the contract is solely probationary with the employer having the option to terminate, this income cannot be used for affordability assessments.

Professional Sports People:

Halifax also provides mortgage solutions for professional sportspeople. Continuous employment of 12 months or more with at least 6 months remaining in the contract, or two years of uninterrupted service in the same type of employment, is necessary for their financial consideration.

Halifax Contractor Lending Guidelines

Halifax Contractor Mortgages follow specific lending guidelines to ensure fair and consistent income assessment:

1. Income Verification: For employed contractors, income is verified by comparing the gross value of the contract to the income calculated from payslips or bank statements. The lower of these two figures is used for affordability assessments.
2. Limited Companies: Contractors with limited companies must provide income evidence from the contracted employer, not their own business entity.
3. Fixed/Short Term or Agency Contracts: Contractors on these contracts with employer deductions have their income verified using the latest month’s payslip(s). The income calculation is adjusted to reflect a 46-week year, ensuring equitable income assessment.
4. Construction Industry Scheme Contractors (CIS): Contractors employed under the CIS have specific guidelines. Income verification involves using the latest three months’ consecutive payslips, invoices, or statements, along with corresponding bank statements. An average of the latest three months’ earnings is used, adjusted to a 46-week year.

In conclusion, Halifax Contractor Mortgages offer a valuable opportunity for contractors to secure their homes. By understanding the specific criteria and lending guidelines set by Halifax, contractors can navigate the mortgage application process with confidence, knowing that Halifax has tailored solutions to suit their unique employment situations.