West One Loans’ contractor mortgage lending criteria
West One Loans’ understanding of contractors’ uniqueness and lifestyles makes it a strong option for mortgage lending. Rather than rely on strict templates, underwriters manually assess each applicant on their merits. That said, the lender has a pathway for each contractor type.
The team accommodates complex income structures and fluctuating earnings for:
- Day rate contractors: limited company/PSC (accounts, SA302 and Tax Year Overview)
- Day rate contractors: umbrella company (gross contract day rate)
- CIS workers
- Zero-hours contractors/locums/agency workers
- Fixed-term contractors
West One's overarching policies for all contractor borrowers
We will list the criteria specific to each contractor type shortly. First, here’s a list policies that West One applies to all contractor borrowers; underwriters:
- Accept applications from all industry sectors
- Require no minimum income
- Use 5 × loan-to-income ratio as standard;
- Offer “LTI boost” for contractors who need >a 5-× LTI ratio; this is available up to 80% LTV (20% deposit) for applicants whose household income is =>£50,000
- Don’t rely solely on credit scores, but determine eligibility by assessing applicants manually
- Use 12 months of proven income upon which to base mortgage affordability
- Incorporate 100% of bonuses, overtime, commission, and second-job income when evidence shows consistency
- Consider all income sources, including dividends, retained profits (for LTD contractors), and even income from irregular contracts
Special features
In addition, West One’s mortgages go up to 95% LTV (5% deposit) for Capital and Interest (repayment) mortgages. For interest-only mortgages, the lender goes up to 75% LTV (25% deposit).
Later-life lending
Borrowers can look to take out mortgages up to a 40-year term. To accommodate these long-term loans, West One offers later-life lending:
- up to age 85 on Capital and Interest (repayment) mortgages, and
- up to age 75 on interest-only mortgages.
Adverse credit
Contractors with adverse credit can also apply to West One. Underwriters accept satisfied defaults and CCJs. They’ll even consider applicants who have unsatisfied defaults/CCJs under £500.
Foreign nationals
West One offers up to 90% LTV borrowing for foreign national contractors as long as they hold any of the following visas:
- Skilled Worker Visa
- Health & Care Visa
- UK Ancestry Visa
Find below West One underwriter’s specific payment structure guidelines to help you see if it’s the right lender for you.
Compare the latest mortgage deals from West One Loans
Day rate contractors: umbrella payroll company
West One uses an umbrella contractor’s day rate as the basis of its mortgage affordability calculation. As well as for traditional mortgage borrowing, the lender also uses this method to assess umbrella contractors for:
- Personal loans
- Secured loans
- Buy-to-let mortgages, giving applicants a simplified path towards property investment
As evidence of income, underwriters need the umbrella company’s payment records and payslips. Using this simplified method reduces the application process time and makes costings transparent for all involved.
Day rate contractors through limited companies, aka PSCs
West One takes a holistic view of LTD contractors‘ income. Underwriters incorporate salary, dividends, and retained earnings when assessing their borrowing potential.
The lender wants to get a true perspective on the business’s viability, as well as that of the contractor applicant. That’s why underwriters will want to see these documents to verify income:
- SA302
- Tax Year Overview
- Profit and loss statements
- Balance sheets
- Corporation tax returns
Contractors who operate through their own limited company often pay themselves through a combination of salary and dividends. These structures can be too complex for mainstream lenders. However, West One Loans has experience in evaluating such cases and can offer flexible lending products to support these applicants.
For contractors with one year’s trading history, West One only requires SA302s and tax year overviews. On that basis, the borrower can borrow up to 85% LTV (minimum 15% deposit).
Contractors with two years’ history or more can borrow up to 95% LTV (minimum 5% deposit). Qualifying applicants will need to provide all the documents listed above.
If a contractor has a consistent, solid, proven track record, West One will consider them for larger loans.
Find out how much you can borrow
Construction Industry Scheme (CIS) workers
West One’s CIS contractor policy is neither one thing nor another. It accepts that workers in the Construction Industry Scheme are self-employed. But then its income assessment pivots towards an employed scenario by looking at CIS income as “net income (after deductions)”.
Most lenders assess full-time, PAYE employees on their gross salary. In contrast, they assess self-employed people on SA302 and verified accounts. West One uses “HMRC statements, payment vouchers, and bank statements to validate CIS earnings” – a mixture of everything.
The lender will work with CIS workers “with irregular or seasonal income, based on a holistic view of their work history.” But most construction industry workers’ income is stable. There’s a disconnect, somewhere.
So, yes: West One works with CIS contractors. But its policy isn’t the most accommodating for CIS subcontractors whose income is subject to tax deductions at source.
Locums, agency and zero-hour contract workers
Locums, agency workers, and zero-hours contractors can all apply to West One for a mortgage. Underwriters will assess applicants’ income over 12-24 months (with 12 months’ history the absolute minimum).
Where the contractor’s income has fluctuated over that qualifying period, underwriters will assess the peaks and troughs. If the applicant’s income has shown consistency, they’ll take that into consideration, too.
Either way, West One’s offer will reflect the stability and sustainability of the contractor’s income. Underwriters will then verify income and history by asking to see bank statements and employment contracts.
Fixed-term contractors
Fixed-term contractors can apply for a mortgage with West One, and can expect a thorough assessment of their financial situation. Because of the shorter nature of fixed-term contracts, underwriters want to ensure stability and sustainability.
They’ll accomplish this by assessing:
- The fixed-term contract itself
- The contract rate/value
- How long the contract has left to run
- How likely the client/agency is to renew the contract
Fixed-term contractors are more likely to succeed at securing mortgage finance if they have:
- A track record of working multiple consecutive contracts, or
- A solid history of clients awarding them contract extensions
Talk to the contractor mortgage experts
As the leading mortgage broker for contractors and the flexible labour workforce, you’ll be in safe hands with Freelancer Financials.
We’re a 100% independent mortgage and protection broker with access to every mortgage from every lender. That means we can offer truly unbiased advice to find you the best deal for your unique circumstances.
Established in 2004, we have a proven track record of arranging over 30,000 mortgages for contractors. This includes umbrella company workers, LTD contractors, CIS subcontractors and the self-employed.
It’s not just us professing our expertise. We have almost 1,000 5-star reviews from clients to back up our claims. Our specialist broking team will support you from pre-application to completion. Whatever your mortgage needs, it’s time to talk to the experts.
West One in a nutshell
West One Loans does cover a broad spectrum of contractor types. And, it includes bonuses, overtime and commission alongside an umbrella contractor’s gross day rate. This policy makes it a strong lender for umbrella payroll employees.
Other types of contractors may struggle. Despite West One’s manual underwriting process, the criteria for all but umbrella contractors start from a weaker position than many other contractor-friendly lender.
To begin your enquiry, talk to our experienced advisors today.
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