Head of Content
Mortgage Advisor & Director
Can you get a mortgage working through an umbrella company?
If you're looking for a mortgage and you work through an umbrella company, you may be wondering if there are mortgages available specifically for umbrella company employees. At Teito, we often get asked this question, so we've put together this guide to help you understand everything about umbrella company mortgages.
What is an umbrella company?
Umbrella companies can be an excellent way for many contractors to get their business off the ground. They are also a great way to reduce your tax burden and protect your income.
An umbrella company is a company that contracts with workers who are in business for themselves. The umbrella company will act as an employer of record and will be responsible for paying taxes and providing benefits to the contractors. For many temporary workers, IR35 changes have also made Umbrella companies an essential payment route.
Working this way certainly has its benefits, but it can also present unique challenges in securing a mortgage. Umbrella company workers are considered to be self-employed, and as a result, they may have difficulty securing a mortgage through traditional channels.
What are the options for mortgages?
There are a few different ways that you can go about getting a mortgage if you work through an umbrella company. The most common option is to get a mortgage with a specialist lender.
Is it harder to get a mortgage working through umbrella companies?
If you're looking for an umbrella company mortgage, it may be harder to find a lender that will work with you. Umbrella company mortgages are not as common as traditional mortgages, so many lenders may not have experience with them. This can make the process of securing a mortgage more difficult, as you will need to find a lender that is willing to take on the risk.
However, there are some specialist lenders who specialise in umbrella company mortgages and can offer you a good deal. It is important to shop around to get the best deal possible.
Many umbrella company workers also choose to secure a mortgage through their own limited company. This can be a more difficult process, as you will need to provide detailed financial information about your business. However, it can offer you more flexibility in terms of the type of mortgage you can secure.
Tips for getting a mortgage as an umbrella company contractor
If you are thinking of getting a mortgage, it is important to work out how much you can afford to borrow. This will help you to find the right mortgage for your needs. You can use a mortgage calculator to get an idea of how much you could borrow.
When working through an umbrella company, it is important to make sure that you are aware of the tax implications. You may need to pay more tax on your income if you are working through an umbrella company, so it is important to factor this into your budget.
It is also important to make sure that you have a good credit score, as this will help you to get a good mortgage deal.
When looking for a mortgage as an umbrella company contractor, it's important to find a lender who takes into account all of your income sources, including commission, bonuses, and allowances. This is particularly important if you're an umbrella company contractor because these types of income are often irregular and don't fit into the traditional mortgage payment schedule.
This will help you get the best deal on your mortgage. At Teito, we work with a wide range of lenders who take into account all types of income, so you can be sure to find the right deal for you. We recommend that you work with an experienced mortgage advisor if you're applying for an umbrella company mortgage, as they will be able to help you through the process.
Get in touch today to find out more.
Contract value or payslips?
Mortgage lenders may consider the contract value rather than payslips.
Looking for a mortgage can be difficult, but there are some benefits to using an umbrella company. Some specialist lenders will consider the overall contract value, as long as the contract has been in force for an acceptable period of time and is signed and consistent with the payment received. This can make it easier to get a mortgage if you're a contractor, as your payslips may not reflect your true income.
More regular income
One of the main advantages is that your umbrella company can provide you with regular evidence of your earnings.
This can be helpful when you're applying for a mortgage, as it gives mortgage lenders a more traditional history of your income. This is important, as it can help you secure a mortgage that's within your budget.
Start now with Teito
Looking for a mortgage can be a daunting task particularly if you're self-employed. But it doesn't have to be. Teito is an online whole of market mortgage advisor service working with 90+ mortgage lenders.
Our service is free to use and we can work with you whether you're a first-time buyer, have adverse credit, or are self-employed. So, if you're looking for an umbrella company mortgage, get in touch today and see how we could help.
Get started now with Teito and you could get a mortgage in principle in minutes.
Choosing an Adviser
Selecting a qualified and experienced mortgage adviser is of great importance. To choose a suitable adviser, evaluate their qualifications, experience, and reputation, and ensure they are regulated by the Financial Conduct Authority (FCA).
Read reviews from previous clients and make sure they provide a clear explanation of the products and services they offer, as well as the fees and charges associated with them.
