Part of the problem is that contractors’ income can change from month to month. But proving future earnings may not be so straightforward. If you are self-employed, you may be able to demonstrate past earnings. Showing what they have earned in the past and will earn in future. Those in salaried employment can easily evidence their income via pay slips and contracts. Or two years’ continuous service in the same type of employment. Applicants must have a continuous employment of 12 months or more with six months of the contract remaining. Halifax will accept the gross value of the contract as evidence of income. If you are an IT contractor or a contractor whose income is more than £500 per day or £75,000 per annum. What criteria is a Lloyds contractor mortgages assessed under? Where the gross contract day rate is annualized for the purposes of deciding how much you can borrow. But, halifax was one of the first lenders to use contract-based underwriting. If you need a contractor mortgages, Lloyds/Halifax can be a good place to start as its underwriters have a good understanding of the market. The group accounts for nearly 20 per cent of the UK mortgage market via its different brands. It recently posted stronger-than-expected pre-tax profits of just over £1 billion for July to September – almost twice what analysts expected – in response to high demand on the back of the stamp duty holiday. "I can completely understand the commercial pressures that have pushed Lloyds Banking Group down this road but it does remove one of Lloyds TSB's unique selling points and means that new customers will get a less good deal, particularly those on a relatively high loan-to-value taking a two-year deal.Lloyds Banking Group is the UK’s largest mortgage lender, formed through the acquisition of Halifax Bank of Scotland by Lloyds TSB in 2009. Ray Boulger of mortgage advisers John Charcol said: "Lloyds TSB, C&G and Nationwide borrowers who wish to remain on a variable rate, which for the time being seems sensible for most people, would be mad to opt out of a lifetime tracker capped at 2% above bank rate with no early repayment changes. The cost of maintaining the 2.5% rate has forced the society to slash interest rates on many savings accounts, resulting in an exodus of savers, who have withdrawn net deposits of £8.2bn, and Beale warned that it might have to cut branches and jobs after the near halving of its annual profits. The society implemented its guarantee as part of the "CAT standards" initiative, a voluntary government scheme introduced in 2000 to prevent confusing marketing and hidden charges.Ĭhief executive, Graham Beale, acknowledged on Tuesday that the 2.5% rate was very attractive, and that borrowers were reluctant to remortgage to other deals: the society still has 530,000 Nationwide borrowers paying the lower SVR, with more going on to this lower rate because they took out mortgage deals before the new higher rate was introduced. The society introduced a higher SVR for new customers a year ago to combat the problem, but the first borrowers will only move on to the new rate of 3.99% in six months. The news comes two days after Nationwide building society admitted that its same guarantee that its SVR would not rise more than 2% above the base rate had cost it £450m in annual profits. Many of its borrowers are opting to stay put and overpay their mortgage rather than remortgage to a new deal at a higher rate." The lender has seen its balance sheet dented by borrowers reverting to a record low rate of 2.5%. Michelle Slade, of .uk, said: "When Lloyds TSB made the decision to guarantee its SVR it never expected bank base rate to go so low. By making the back end a little bit higher, we can reduce the costs at the beginning," she said. "We have to price them for the duration of the mortgage. She said that by raising the "go rate" that borrowers would eventually pay, the bank could offer more attractive initial deals. Nor will the rate apply to Halifax and Bank of Scotland mortgage customers, who have their own SVRs: 3.5% for Halifax, and 4.84% for BoS customers, who have predominantly borrowed higher risk buy-to-let and self-certified loans.Įmma Partridge, a Lloyds spokeswoman, refused to specify how many borrowers were on the lower SVR but said the move was a response to market conditions of prolonged low base rates and high wholesale borrowing costs. This means they will either remain on the standard variable rate (SVR) of 2.5%, or revert to it when their mortgage deal ends. The new rate will not apply to existing borrowers, who will continue to benefit from the guarantee, which was first made at the beginning of the decade.
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