NatWest Contractor Mortgages
Your Path to Homeownership
NatWest, one of the UK’s leading banks, recognizes the changing landscape of work post-recession. As a contractor, you deserve a mortgage solution tailored to your unique needs. We at MortgageTek are proud to partner with NatWest to bring you exclusive access to their contractor mortgage offering. Learn how NatWest is opening doors for contractors like never before.
NatWest sets the bar high for contractor mortgages. To qualify, contractors must have a day rate of £326.00 or more, equivalent to a gross income of £75,000 annually. While this requirement may seem stringent, it is part of NatWest’s commitment to responsible lending and minimizing risk. Our strong relationship with NatWest’s underwriting teams ensures you benefit from a contract-based mortgage unavailable on the High Street.
The Ideal Contractor Borrower Profile
NatWest considers various factors beyond income when evaluating mortgage applications. They assess your work history to ensure that you have earned your current contract rate and can sustain it. Unlike some lenders who accept applicants from day one of their first contract, NatWest prefers contractors with a minimum of six months’ contracting history.
Moreover, NatWest looks for a further six months remaining on your contract at the time of application. While this may pose a challenge, NatWest has a clever solution. They consider a twelve-month contracting history that includes the date of your application. For instance, if you have completed a six-month contract and are halfway through your next, with a total of nine months of history and three months of guaranteed work, you meet their criteria.
NatWest offers an advantage to contractors with 12 months or more of contracting experience. While most lenders require at least three months remaining on your existing contract or an extension, NatWest only requires one month left on your contract if you have a year’s history under your belt.
Attention to Detail: Shareholding and Limited Companies
NatWest has a unique requirement regarding the shareholding structure of limited companies. Contractor applicants must own 100% shares in their limited company, eliminating any other shareholders.
Calculating Your Borrowing Potential
Determining the size of the mortgage you can afford is crucial. Let’s take a look at an example calculation based on a contractor earning £330 per day, working five days a week. NatWest uses a 46-week annualization period and applies a multiplier to estimate your borrowing potential.
For illustrative purposes, using a 4.5 multiplier, the calculation looks like this:
– £330 (day rate) × 5 (days worked per week) = £1,650
– £1,650 (weekly rate) × 46 (weeks per year) = £75,900
– £75,900 (gross annual income) × 4.5 (average multiplier) = £341,550
Based on this calculation, a contractor earning £330 per day with a good credit rating could potentially borrow up to £341,550 for a mortgage.
Unlock Your Dream Home Today
With NatWest Contractor Mortgages, your dream of homeownership is within reach. Experience a mortgage solution specifically designed for contractors, allowing you to secure your perfect home. Pre-qualify now and take the first step towards unlocking a brighter future.
NatWest Lending Criteria for Contractors
At MortgageTek in partnership with NatWest, we believe in empowering contractors to achieve their homeownership goals. Our lending criteria are designed to accommodate the unique financial circumstances of contractors earning under £75,000 a year. Here’s how we can help you secure your dream home:
Self-Employed Contractors
NatWest classifies anyone who undertakes a contract to perform labour or services or provides materials and earns under £75,000 a year as self-employed. If you fall into this category, our lending criteria have specific requirements to make your mortgage application a seamless process. Please review the details below:
- Income Calculation: For self-employed contractors earning more than £75,000 per year, we calculate your income as your average weekly contract income multiplied by 46.
- Documentation Required: To proceed with your mortgage application, you will need to provide the following documents:
- Bank Statements: Submit your latest three months’ consecutive personal bank statements for your main account. Please note that this isn’t required if your main account is with NatWest or Royal Bank of Scotland.
- Business Expenses: If your application includes significant business expenses, provide three months’ consecutive bank statements (personal or business) detailing these expenses.
- Contract Details: Include a copy of your contract (or contracts) covering a 12-month period, with a minimum of six months’ contracts completed immediately preceding the date of application.
- Continuity: Confirm that you’ve taken no more than a six-week break between contracts in the 12-month period.
- Tax Compliance: Ensure your tax position is paid and up to date.
- Day-Rate Contractors: We can also assist day-rate contractors who have switched or are switching to a fixed short-term contract or an umbrella company as long as they continue to meet the criteria for existing high-income day-rate contractors.
Contractors Trading Through a Limited Company
If you’re a contractor trading through a limited company, there are some additional criteria to consider:
- Types of Applications: Your application must fall into one of the following categories:
- A single application where the applicant owns 100% of the company.
- A joint application where one applicant owns 100% of the company.
- A joint application where the company is jointly owned by both applicants.
- A joint application where one applicant owns 100% of the company, and the other applicant is employed by the company (in this instance, the employed applicant’s income should be excluded to avoid double-counting).
- Accounting for Expenses: Any significant business expenses that are not covered by your contract must be fully understood, evidenced, and accounted for in the affordability calculation. This includes expenses such as car/finance loans, extended travel and accommodation costs, training courses, professional indemnity insurance, and partner/spouse/employee salaries (spouse’s income only needs to be factored in if their income is being included on the application under the ‘income’ section).
Fixed Short-Term Contracts and Umbrella Company Contracts
For contractors with fixed short-term contracts and those working with umbrella companies, MorgageTek has specific guidelines to streamline your mortgage application:
- Fixed Short-Term Contracts: Provide the most recent four weekly payslips and a copy of the contract, even if you have not yet started the contract. If you do not have four weekly payslips, submit a copy of the contract along with any payslips received so far.
- Umbrella Company Contracts: Include the most recent four weekly payslips, a copy of the contract (even if you have not yet started the contract), and the amount to be levied by the Umbrella Company for the use of their services, deducted from your income. Clarity in this matter is essential for us to assess your application effectively.
Your Mortgage, Your Future
MortgageTek is your dedicated contractor mortgage broker, committed to simplifying your mortgage journey. We work closely with you to understand your unique situation and guide you through the mortgage application process. With NatWest’s tailored lending criteria and our expert assistance, your dream home is closer than you think.
Ready to embark on your homeownership journey? Contact us today to get started with NatWest Lending Criteria.
Disclaimer: The information provided here is for general guidance. Specific lending criteria may vary, and it’s advisable to consult with MortgageTek for personalized advice and assistance with your mortgage application.