Clydesdale is a reputable lender known for its willingness to consider mortgage applications from both day rate and hourly rate contractors. Regardless of whether a contractor operates through a limited company or a payroll umbrella, Clydesdale is open to reviewing their application.
Clydesdale is distinguished for its flexible lending approach, often applying manual underwriting processes. This means they are sometimes able to make exceptions in certain cases.
Clydesdale’s Criteria for Day Rate Contractors:
- Contracting Experience: Clydesdale requires a minimum of 24 months of contracting experience for applicants.
- Open to All Contractors: Applications from contractors across various fields are considered.
- Minimum Contract Value: Unlike other contractor-friendly lenders, Clydesdale accepts applications with a minimum contract value of £50,000, which corresponds to a minimum daily rate of £217.50.
- Remaining Contract Duration: Clydesdale expects at least four weeks remaining on a contractor’s current contract. They understand the short-term nature of contracts and do not demand a lengthy remaining duration. For contracts with less than four weeks left, an extension or a new contract might be required.
- Employment Gaps: Clydesdale prefers a continuous work history over the previous 24 months, allowing for up to six weeks between contracts. Short breaks, like holidays, are considered acceptable.
- Contract Value Calculation: Clydesdale calculates the average contract value over the previous 12 months, not just the current contract value. They typically multiply the day rate by five (for a working week), then by 46 weeks to ascertain the gross contract value. The average daily rate from the previous year is not used in these calculations.
Example Calculations:
- Day Rate: £350 per day x 5 days x 46 weeks = £80,500 gross contract value.
- Hourly Rate: £42 per hour x (stipulated or 37.5 hours default) x 46 weeks = £72,450 gross contract value.
Application Requirements:
- Proof of ID (such as a Passport or DVLA Licence).
- Proof of Address (such as a Utility Bill and Council Tax Bill).
- Current Contract with Terms and Conditions, signed and dated.
- Previous Contract to evidence a 12-month contracting history.
- Clydesdale Declaration, Direct Debit Mandate, and Assets and Liabilities Statements.
- An up-to-date CV demonstrating a strong track record.
- Three months of personal and business bank statements.
- For property purchases, proof of deposit or a gifted deposit letter, along with the template we provide if needed.
Providing all necessary documentation upfront streamlines the process and enables us to present your application to Clydesdale’s contractor mortgage underwriters effectively, ensuring a prompt and favourable decision.
Clydesdale Contractor Mortgage
If you’re a contractor looking for a mortgage, Clydesdale Bank might just be the lender you’ve been searching for. Known for their flexible approach and willingness to consider both day rate and hourly rate contractors, Clydesdale makes getting a mortgage more accessible, even if your employment situation isn’t traditional.
Whether you operate through a limited company or a payroll umbrella, Clydesdale is open to reviewing your application.
Why Clydesdale is Ideal for Contractors
Clydesdale stands out in the market due to their flexible lending criteria and manual underwriting process. This means they don’t just rely on automated systems but have real underwriters assess each application individually. This approach allows them to make exceptions and consider the unique aspects of your contracting history. Here are some of the main reasons why Clydesdale is a top choice for contractors:
Flexible Criteria
Clydesdale welcomes applications from contractors in various industries.
Manual Underwriting
Each application is personally reviewed, allowing for a more nuanced assessment.
Non-Traditional Income Considered
They understand the complexities of contractor income, whether you’re drawing a salary, taking dividends, or relying on day rates.
Clydesdale’s Contractor Mortgage Criteria
To ensure your application goes smoothly, it’s essential to understand Clydesdale’s criteria for contractor mortgages. Here’s what you need to know:
Contracting Experience
- Minimum Requirement: You need at least 24 months of contracting experience.
- Employment Gaps: Short breaks between contracts (up to six weeks) are acceptable, as they understand the nature of contracting work.
Contract Value and Duration
- Minimum Contract Value: Clydesdale requires a minimum annual contract value of £50,000. This translates to a daily rate of £217.50.
- Remaining Contract Duration: You must have at least four weeks left on your current contract. If you have less time remaining, you may need to show an extension or a new contract.
Income Calculation
- Day Rate Calculation: Clydesdale calculates your gross contract value by multiplying your day rate by five (working days) and then by 46 weeks.
- For example, if your day rate is £350, the calculation would be:
- £350 per day x 5 days x 46 weeks = £80,500 gross contract value.
- Hourly Rate Calculation: For those on an hourly rate, the formula is similar, using a default of 37.5 hours per week unless otherwise stipulated.
Essential Documentation for a Clydesdale Contractor Mortgage
To present a strong application, make sure you have all the necessary documentation ready:
- Passport or driving licence for identification.
- Recent utility or council tax bill for address.
- Signed and dated current contract with terms.
- Previous contracts showing at least 12 months’ work.
- Last three months of bank statements.
- Updated CV detailing your contracting history.
- Proof of deposit or gifted deposit letter.
Key Benefits of Choosing Clydesdale
Clydesdale’s manual underwriting process gives them the flexibility to take a common-sense approach to lending. They recognise that contractors often work in a tax-efficient manner and shouldn’t be penalised for not drawing a traditional salary. This means they can offer competitive high street mortgage rates and a borrowing capacity that reflects your true earning potential.
Highlights of Clydesdale’s Contractor Mortgages:
Highly Competitive Rates
Access to favourable mortgage rates usually reserved for traditional employees.
Customised Approach
Each application is considered on its own merits, increasing your chances of approval.
Quick Processing Times
With all documentation in place, you can expect a mortgage in principle within 24 hours.
How Mortgage Knight Can Assist
At Mortgage Knight, we have a direct line to Clydesdale’s senior underwriters, ensuring that your application is reviewed by professionals who truly understand contractor-specific challenges. Our team is experienced in handling contractor mortgage applications, and we know exactly what Clydesdale is looking for.
Our Process
Initial Consultation
We’ll discuss your circumstances and determine if Clydesdale is the best fit for you.
Document Review
We’ll ensure you have all the necessary paperwork in order.
Application Submission
We’ll submit your application to Clydesdale with a complete set of documents, reducing the chance of delays
Quick Turnaround
Typically, we can secure a mortgage in principle within 24 hours, with the full application process taking around three days and completion in two to four weeks.
Get Started with Clydesdale Bank Contractor Mortgages Today
If you think a Clydesdale Contractor Mortgage could be right for you, don’t hesitate to get in touch with Mortgage Knight. Our expertise in contractor mortgages means we can guide you through every step of the application process, helping you secure the best deal for your needs.
Contact us today to discuss your options and take the first step towards securing your Clydesdale Contractor Mortgage. We’re here to make the process straightforward, so you can focus on what matters most—finding your perfect home.
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