Every freelance and contract worker who manages to succeed over the long term eventually learns a very important lesson: you can’t go it alone. Every self-employed person needs help and advice from time to time. Indeed, the more often a contractor seeks advice from others, the more likely he or she is to succeed in reaching his/her goals. That’s the way it works.
So why should it be any different when a contractor is looking for a mortgage? Actually, it’s not. Contractors and freelancers who turn to specialist contractor mortgage advisers not only get great mortgage deals, but they also get a plethora of free advice that helps them better understand how a mortgage integrates into a much larger financial picture.
More Than Just a Shopper
People confuse mortgage brokers as being nothing more than shoppers. In other words, all they allegedly do is scan mortgage deals so they can find the best one to offer a particular client. Brokers certainly do that, but shopping around is not all they do. It is just a small portion of the broker’s overall job.
A mortgage broker is a financial adviser with specialised knowledge of mortgages. A broker understands the fundamental principles of good money management, sound financial planning, etc. He/she knows how a mortgage fits into the short- and long-term goals of the client. And he/she knows how to put everything together to ensure the brightest financial future.
Shopping around for great mortgage deals is really a bonus when you look at it this way. You get mortgage shopping services coupled with free advice from an expert. It is hard to beat that. Bank loan officers just cannot compete.
Finding the Right Contractor Mortgage
As a contractor or freelancer, you are no different than your employee counterparts when it comes to wanting the best mortgage deal you can get. You do not want to pay higher interest than necessary. You don’t want more costly fees, early payment penalties, etc. But you are at a disadvantage.
Because you work as a contractor, you automatically represent more risk to traditional lenders. For some reason, lenders feel more comfortable with borrowers who have regular 9-to-5 jobs. Lenders are more confident in the permanency of such employment arrangements. You do not bring steady 9-to-5 work to the table. You are a contractor.
The end result is that your higher risk means less favourable mortgage deals. You may not realise just how unfavourable said deals are if you go straight to the lender and take whatever deal they offer. On the other hand, a mortgage broker gives you options. He/she can advise you as to whether or not one particular mortgage is the right one for you.
A Big Picture View
The one thing you will get from mortgage broker that you cannot get from a bank loan officer is a big picture view. Simply put, bank officers look at mortgages only from their own perspective. They look at their own risk and the value proposition a particular mortgage offers. If both are in their favour, the loan officer will approve the mortgage.
A mortgage broker leaves the risk and value proposition to lenders. Instead, the broker looks at the mortgage through the perspective of the borrower. Does a particular mortgage line up with the big picture? Does it meet the client’s needs while also facilitating more sound financial planning? These are the kinds of things a mortgage broker looks at.
Contractors and freelancers have every opportunity to go directly to banks looking for mortgage deals. Many of them do. But at the end of the day, there is no substitute for good financial advice. That means using a specialist mortgage broker with experience working with contractors. Such brokers are the most qualified to help contractors obtain their funding.
It is all about good advice at the end of the day. It’s about working with a seasoned professional who understands financial planning and can integrate borrowing into such plans. If you are a contractor or freelancer looking to buy a home, do yourself a favour and at least consider applying for your mortgage through a broker.
Throughout the process, do not be afraid to ask questions. Pick the broker’s brain for every piece of advice you can get. A mortgage broker’s sound advice could mean the difference between just buying a house and buying one that integrates nicely into your short- and long-term financial plans.
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Founder Dinis Guarda
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