Are Independent Contractors Eligible for a Mortgage?

“I want to apply for a mortgage so I need to get a permanent role”.

This is by far the most common objection I come up against when speaking to potential candidates about day rate contract roles. As the housing crises intensifies in Ireland there is a lot of misconceptions when it comes to independent contractors and mortgages. Firstly, as an independent contractor you are no different to 10’s of thousands of other self-employed people in Ireland who have a mortgage. According to the World Bank collection of development indicators, Self-employed; total (% of total employed) in Ireland was reported at 16.52 % in 2017.

Self-employed workers are those workers who; working on their own account or with one or a few partners or in cooperative; hold the type of jobs defined as a self-employment jobs (i.e. jobs where the remuneration is directly dependent upon the profits derived from the goods and services produced). I speak to self employed contractors every day who have mortgages.

A contractor is no worse off than an employee when it comes to applying for a mortgage. In fact, a contractor may be in a position to borrow more as it’s likely you’re earning more money as a contractor than the equivalent permanent colleague.

If you have sufficient income and your accounts are up to date then getting a mortgage as a self-employed person or an employee isn’t hugely different. You make your application, submit your documentation, and prove you can make your repayments.

The 3 key documents you need as a contractor applying for a mortgage are:

• 3 years’ financial accounts certified by an accountant
• 6 months’ bank statements
• 3 years’ Revenue Notices of Assessment and Tax Clearance certificates

A mortgage broker should be your first point of call. I would strongly recommend using a broker who is familiar with the contracting industry. Avoid walking straight off the street into one of the main banks. It’s also vital you have a good accountant. Your accountant will take away some of the hassle in preparing your application and a bank will put a lot of trust in your accountant.

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If you’re interested in discussing contract opportunities please get in touch with Rory of Azon Digital at rcorbett@azon.ie.