Nationwide are the largest building society in the country, and one of the best known names in High Street banking. They are a lender who has previously recognised that contractors are low risk when it comes to mortgage funding, and as a result they offered bespoke contract-based underwriting.
Unfortunately these arrangements came to an end with the credit crisis in 2008, when lenders were looking to standardise and streamline their underwriting. Case-by-case bespoke underwriting ceased at Nationwide at this point, to be replaced by a much watered-down version. This had the desired effect of curbing new mortgage lending.
Recently, however, we have been able to obtain contractor specific criteria to enable both umbrella and self-employed contractors to access Nationwide’s rates, potentially utilising full contract value. Prior to this recent change, all requests outside of ‘normal’ criteria had to be assessed by Head Office as ‘exceptional requests’.
For those contractors utilising their own limited company, income can either be verified by way of accountant’s reference, or by using contract rate. One of the strengths of this lender is where trading income has dropped in the most recent year, Nationwide will accommodate this and work on the latest year salary and dividends, rather than declining outright, which is the standard position of most of their competitors.
At CMME, we have traditionally used Nationwide for those contractors who are able to prove an income via self-employed criteria, with declining profit of late. This month’s change, however, should see Nationwide become a far more viable option for far more contractors.
