Day Rate Contract Mortgage

A day rate contract mortgage is a specialized type of mortgage that caters to self-employed or contract workers who earn their income on a daily or hourly basis. These workers often have fluctuating incomes and may find it difficult to qualify for a traditional mortgage.

The day rate contract mortgage takes into account the income variability of contract workers by assessing their income over a period of time, typically 12 months, instead of only looking at their most recent pay stubs. This means that even if a contract worker has a lower income month, this won`t necessarily disqualify them from getting a mortgage.

One advantage of a day rate contract mortgage is that it can allow contract workers to access the housing market and own their own home. This type of mortgage can also potentially offer lower interest rates than other alternative mortgage options and allow for more flexibility in mortgage payments.

However, there are also some potential drawbacks to this type of mortgage. It may come with higher fees or more stringent lending requirements since contract workers are seen as higher-risk borrowers. Additionally, it can be more difficult to shop around and compare different lenders for this type of mortgage as it is not as widely offered as other mortgage types.

It`s important for contract workers to carefully consider their options and talk to a financial advisor before deciding on a day rate contract mortgage. They should also shop around and compare different lenders to ensure they are getting the best deal possible.

In conclusion, a day rate contract mortgage is a specialized type of mortgage that can offer contract workers a path to homeownership. While it may come with higher fees and more stringent lending requirements, it can also offer more flexibility in mortgage payments and potentially lower interest rates. As with any major financial decision, it`s important to do thorough research and consult with a professional before making a final decision.