Accord mortgages are an intermediary-only mortgage lender of Yorkshire Building Society Group. They are the UK’s second largest mutual building society with assets worth more than £34.5 billion. They have more than 4,300 staff employed in over 231 branches, and almost 100 associated agencies. Other brands within this group include the Chelsea Building Society.
Is a mortgage from Accord suitable for me?
Whilst Accord mortgages have some of the most competitive rates on the market for permanent employees, the lender unfortunately has very little flexibility towards contractors. The lending criteria is very streamlined, meaning contractors will have their application assessed under two categories, “employed” or “self-employed” underwriting.
At present, the lender is not regarded as “contractor-friendly” to those who use any type of umbrella or payroll service. They do not demonstrate an understanding of these payment methods, and their underwriting is not set up to assess or understand this type of structure. As a result, it is very likely a contractor will experience a shortfall in funding, or a declined application.
For a limited company set-up, the lender will request the latest three years limited company trading figures, with the income being assessed via the latest two years, with an average salary and dividend draw being used to define earnings. Accord have minimal flexibility to any type of “declining income” and this will more than likely lead to an adverse lending decision.
Accord do not work on ‘income multiples’ to calculate borrowing, they use an affordability calculator that takes into account spending, number of dependents, and debts. This calculation can be very conservative, with multiples of less than 3 x earnings not uncommon for those with dependents and ongoing costs.
Accord’s mortgage lending distribution strategy means they have competitive products, but a risk averse approach, and more than often contractors struggle to command the loans they require.
Would CMME recommend Accord to contractors looking for a mortgage?
Although Accord offer consistently competitive rates, they are only aimed at a select few. There are many other lenders to consider when looking for a ‘contractor-friendly’ mortgage.
CMME recommends you talk to an expert that specialises in contractor mortgages before approaching a lender. They will be able to assess your situation, discuss your position with the lender in advance and ensure everything is correct with the application before submission. This will minimise the risk of an adverse lending decision. You can find out how much you can borrow by using our mortgage calculators.