When it comes to contractor mortgages, many people have heard of the term in its most general form but not many people know what the whole topic involves. In its most basic form, a contractor mortgage is a specialist mortgage package that differs from the traditional product and provides many advantages for the self employed.
With advantages come disadvantages in other respects however, and contractor mortgages have proven to have many pitfalls and downsides too. One of the major disadvantages is that it is one of the hardest products to get hold of because of the amount of risk that is involved. For instance, some banks don’t even have contractor mortgages available because of the risk that is associated with the self employed. This isn’t an ideal scenario and many people are now struggling to get hold of a product that is suited to them because there is a distinct lack of opportunities. Not only that, but because there are fewer companies to choose from, deals with competitive rates are becoming increasingly hard to come by. Aside from the obvious disadvantages however, there are some advantages to these kinds of products.
One bonus is that as a contractor you could be earning more money in comparison to people on fixed incomes at a given time. This potentially means that you could start higher on the property ladder because of the money you have at a certain time, and would also mean that once you are approved, you would be entitled to borrow larger sums of cash than those on a fixed income.