At Limitless Finance, we specialise in helping contractors secure mortgages that match their true earning potential. Here are the five most common mistakes we see, and how to avoid them.
Treating Themselves Like Self-Employed Borrowers
Many contractors assume they’ll be assessed the same way as self-employed borrowers.
The reality: lenders often treat contractors like employees, focusing on your current contract and day rate, rather than historical tax returns.
Tip: Work with a contractor-friendly broker who understands this distinction. This ensures your income is calculated on your present earning potential, not past accounts.
Not Including Bonus or Allowance Income
High-earning contractors frequently receive bonuses, travel allowances, or housing stipends, but some fail to include these in their mortgage application.
The impact: excluding these can reduce your assessed income and lower your borrowing potential.
Tip: Keep evidence of consistent bonuses or allowances (payslips, contract clauses) and provide them to your broker. Most lenders will include guaranteed or regular bonus income in their calculations.
Gaps Between Contracts
Even short gaps in employment can raise red flags with lenders. Contractors who take a break between contracts without evidence of a pipeline can see borrowing power reduced.
Tip: Keep documentation showing future contracts or extensions. A contract lined up before your current one ends is ideal. Some lenders will even accept offers of work as proof of continuity.
Giving Too Much Information
Contractors often think that submitting every document they have will help their mortgage application, but too much information can actually create problems. Once an underwriter sees something, they can’t “unsee” it, and unnecessary details can raise questions or slow down the process.
The key is knowing exactly what lenders need, and nothing extra. Working with an expert ensures you submit the right documents in the right format, helping your application move through smoothly and efficiently.
Choosing the Wrong Lender or Broker
Not all lenders understand contractors. Many high-street banks are cautious and will offer lower-than-possible lending amounts. Using a broker who doesn’t specialise in contractor mortgages can also hurt your outcome.
Tip: Partner with a specialist contractor mortgage broker, like Limitless Finance, who knows which lenders will fully recognise your day rate, bonus structure, and contract stability.
Extra Tip: beware of broker fees
Broker fees might reduce how much you can borrow, so it’s important to be aware of them. Many people assume they need to pay for specialist contractor mortgage advice, but all mortgage advisors, including contractor specialists, are paid by the lender once your mortgage completes.
Some contractor specialist advisors also charge client fees ranging from £495 to £2,000. These fees come out of your deposit, which can directly reduce your borrowing power.
For example, a first-time buyer with a £20,000 deposit on a 90% LTV mortgage who pays a £1,000 fee effectively reduces their deposit to £19,000. This could mean affording a £190,000 property instead of a £200,000 one.
Finding a mortgage broker who understands contractors but doesn’t charge a client fee can be tricky—that’s where Limitless comes in. Even a seemingly small fee can have a significant impact on what you can afford, so it pays to choose wisely.
Contractors can often borrow more than permanent employees earning the same take-home pay, but only if their application is presented correctly. Avoid these common mistakes, prepare the right documents, and work with a broker who understands contractor income.
At Limitless Finance, we specialise in helping contractors get the mortgages they deserve. Reach out today to see how much you could borrow and start your mortgage journey with confidence.
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