Q1 - February - Trading Performance Review

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22 Trades, 12 Winners, 5 Losers & 4 Break Even equating to a 54% strike rate and closing the month of February with 6.6% Return on Investment.

Out of 22 trades, 17 were SELL’s this month, leaving 5 BUY’s.

Out of the 4 weeks of February, there was again only one single negative week of -0.63%.

A key breakthrough and focus this month really has been on focusing on High Probability Setups vs Valid Setups.

A High Probability Setup is taking a trade around an area of value based on the Higher Timeframes, whereas a Valid Setup is a some of structural pattern that aligns on the Lower Timeframe but may not be at an area of Value on the Higher Timeframe.

Throughout March I’ll be working on filtering these trades further to reduce the total of trades taken, as upon reflection the amount of trades against the total return is not congruent and will be a goal on reducing this significantly.

Following the same format, I’ll breakdown some of the best and worst trades of the month.

(Remember to ‘Tap' or ‘Click’ the images to flick through each of the trades as these are slideshows)

NZDCAD

  • 50% Retracement and corrective ascending structure

  • 15M Ascending within Ascending at top of structure

  • Possible to go to structure lows to complete pattern of 3 Touch

  • Price still at top of structure zone so valid High Probability setup

Was actually tapped in by a pip, before it retraced for a mini double top on the news before dropping. Good enough stop placement kept me in this trade.

High Probability Setup and great management, with slightly higher aggression towards the third touch of the structure low but understanding a hover could present itself to carry on to break structure, so gave this enough room until the descending structure began forming.

After seeing the descending structure, knew it was possible a deeper correction could occur rather than  small hover, and it would be best to lock in profit and look for a Risk Entry with the deeper correction.


USDCAD

  • Arch into Double Top on 15M

  • Decelleration at top of structure

  • Daily Trendline retest

  • Hourly Falcon Flag formation

Valid Position, just not High Probability Position. Came from an impulse and HTF was not in line with lower and 15M. The Daily actually had a descending nature to it, with a strong momentum candle, so it was more ambitious entry as it was going against the HTF.

Happy with the management to aggressive manage, as this did eventually move further to the upside.


GBPUSD

  • Expanding Triangle Formation on Hourly

  • HTF momentum to downside with strong daily close

  • 2 Touch Corrective formation

  • Risk Entry on 15M with Double Top and ascending channel

Good and high probability trade, a better entry would have been the retracement on the 15Minute but I didn’t catch this in time.

By getting the better entry management would have been easier, I closed this out a little too early as it dropped another 2%, however it did eventually retrace with a large spike so I wouldn’t have capitalised this entire 2%.

Happy with the trade and management overall.


NZDUSD

  • Impulsive break of inflection points on Daily & 4 Hourly

  • Heavy momentum to downside.

  • Still a little room till next inner structure

  • 15M Ascending Channel 

  • 15M Ascending within Ascending

  • Hourly Bear Flag formation

Due to going to bed, wasn’t able to capitalise further on the trade, however with real management in person would only have yielded a 1% win overall b the looks of it.

Valid trade, however I knew it was possible that it could evolve into a deeper corrective structure from this before, however it was probable of dropping so happy to take the Risk Entry to see if it does move.

No real way to manage this when it took me out of my Stop for 0.5% overnight in the early morning.

Happy with the trade and management, would do the same.


EURUSD

  • Break of Daily Corrective Structure

  • Tight Corrective price action on hourly

  • 15M 2 Top Flag Structure

Was a Valid Setup, but not the best and would probably avoid in future. I knew management had to be aggressive on this, but the break had potential to carry on for the outer structure Third Touch. In this, I was ignorant to the potential Double Bottom at the Third Touch zone of the larger descending pattern, and I should have separated patterns in this case.

Happy with the management of moving to 0.5%, had the chance to move to a Full Break Even on the retrace, but I’ve experienced EURUSD retesting and dropping and I’ve emotionally closed and seen it drop. Was happy to accept a 0.5% Risk on that potential as I was already in the trade, but could have avoided this completely and seen the better BUY setup playing out.

A better and safer entry would have been the Risk Entry on the Double Top Retracement on the 15M, I actually watched this play out pondering whether to enter the trade but I didn’t want to Risk it at this level with a possibility of a larger continuation up - however this would have made management easier and been able to move to Break Even leaving more room for price to breath.

A better and safer entry would have been the Risk Entry on the Double Top Retracement on the 15M, I actually watched this play out pondering whether to enter the trade but I didn’t want to Risk it at this level with a possibility of a larger continuation up - however this would have made management easier and been able to move to Break Even leaving more room for price to breath.


EURUSD

  • Impulsive Daily Candle and Third Touch Retracement

  • Hourly Impulse

  • 15M Penant Continuation Pattern

Although a Valid Setup, again it wasn’t the best as a possible larger continuation could likely to form. I accepted this in the evening forecasting before placing the trade, but the Tighter Flag was forming that I decided to take a Reduced Risk Entry.

Woke up in the evening to around 3 PIPs in drawdown and price wasn’t looking good at the time to continue up so I manually closed. Just after closing it dropped  all the way back to the lows. Happy with the management and decision, may be best to avoid in future especially going into the Asian Session.


AUDUSD

  • HTF Corrective Structure

  • HTF still possible to correct up for a Double Top / 2nd Top

  • HTF descending within descending so more Risky and possible reversal

  • Aim to play down move within the corrective channel

  • Multiple Touch on Hourly Ascending structure

  • Arch into Double Top on Hourly

  • Ascending within Ascending at the Top of Structure, Ascending Corrective

  • Strong Impulsive Rejection and Retrace


Was just a case of probabilities this time, with the news announcement over night of the AUD. Perhaps took this a little too close to the mark switch over times and holding overnight without being able to efficiently manage.

Entered trade around 20:00 but no real movement. Stop size couldn’t have been improved as the spike would have always have happened.

Entry was a little too wide, moving into the 15M it’s clear the entry was large and in hindsight this was an emotional trade placement. A better approach should have been to await a correction after the move instead of trying to catch the top - (which leads to the next trade).

AUDUSD

I awoke during the night and saw I had been taken out of the previous trade, along with the impulsive momentum I placed an entry after seeing a correction on the 15M.

Was not the best entry, I had placed the entry around where 15M was currently and by time it had dropped my entry was already far away from previous candle.

Wouldn’t have normally been in this trade as wouldn’t be up at that time to take it, but a valid and generally a good trade (if entry was tighter at a better time).

Fortunately just a trade that played out, but risky taking during the night after awaking. Will not be doing that again.


EURUSD

  • HTF Descending Channel

  • Descending within Descending Breakout

  • Correction after Impulsive Breakout

  • Second Touch of Flag Formation

  • Corrective descending structure to second bottom / test of outer structure


EURUSD

Following on from last trade, looking at a bounce within the flag after descending nature within the structure.

Very happy with the trade and great entry on this one. Unfortunately did not play out in this case.

Could have locked in 1% Profit at the Structure Highs, but didn’t at this time as FOMC was upcoming and this always provides huge volatility, with the potential of spiking down then shooting up - something I was happy to Risk, as at this point I was protected at Break Even.


EURUSD

Again persistence with the Continuation Pattern to the upside, resulting in another Break Even.

Position 3 - Close.png

GBPAUD

  • Double Top

  • Ascending within Ascending

  • Multi Touch Resistance at Double Top zone

  • Corrective Ascending Nature towards Double Top

  • Impulsive move out of Corrective Ascending Structure

  • HTF Ascending within Ascending


USDCAD

  • HTF Descending Expanding Wedge

  • 2nd Touch of HTF Structure

  • 4 Hourly Double Top and Impulsive Rejection

  • Impulsive Break of Ascending Trendline

  • Tight Correction

Avoidable by having awaiting a Risk Entry.

Price on the 15M was correctively approach the entry, this was the signal that this was looking to move up one more time. I watched this, but kept the entry - a safer place would have been to enter on the break of the low.

Almost closed only a couple of PIPs into the entry of the trade, due to the correctiveness but didn’t - need to work on the emotional control of closing out. I was comfortable leaving it as I was anticipating the Risk Entry at the top so thought it would drop and remain in profit. With this logic, I should have closed for a smaller loss for the better trade anyways and preserve capital.

USDCAD

  • Evolved Trendline & Impulsive break / continuation from previous 

  • Tight 15M Flag and Hourly Corrective Continuation Formation

For the Risk Reward - should have remained at 1% and not moved to 0.5%. In these circumstances, it’s best not to be greedy and trying to achieve a small amount of profit when the downside potential is higher.

Keeping at breakeven could have closed for just over 1.4% instead of a smaller amount.


EURJPY

There were two points of interest, the inner structure Third Touch or the Outer Structure Third Touch. 

As price reached inner structure Third Touch, we saw a rejection and I took a continuation on the 15M. Knowing that it was possible this could just be a move down short-term before a move up for the larger outer structure sell.

  • HTF Ascending Channel

  • HTF Correction after impulsive move

  • LTF Ascending within Ascending

  • Hourly Retrace at Third Touch

Very happy with this trade however it was a mismanagement, a High Probability Setup at Third Touch, with retracement and Risk Entry.

I should have left this at Break Even, with the potential to the downside and taken in a scale-in (which would be the next trade below). This would have enabled me to lock in around 2% safely.

Moved past Break Even just to reward myself and looking fairly impulsive from the trendline bounce, however a ‘Hover’ Formation was being created in hindsight analysis and potential Double Top in that zone was possible so not a safe place to move a Stop to.

Great Entry, just needed better management and less aggression.

EURJPY

  • Continuation from previous confluences

  • 15M Double Top within Ascending Triangle / Falcon Flag Formation

  • 15M Retrace

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Lovely pattern, with the expanding Triangle Double Top Risk Entry formation.

Management could have been improved, was expecting a possible a retest of the trend line break, but it just broke back through.

Potential to move to 1% on the break of the trendline but with the potential to the downside at this point I didn’t want to squeeze the trade to be tapped out then it drop.


EURUSD

Corrective Ascending Pattern within Expanding Wedge on the Higher Timeframe.

Potential to:

  1. Move down for Third Touch before Bounce within Expanding Wedge

  2. Break down to HTF outer structure for Third Touch

The second scenario was possible as this would complete the pattern, which would then create a reversal, descending pattern with 3 Touches, which would be a higher probability Pattern within Pattern setup.

Looking to capitalise on the move down from here for a Short Term play for the pattern completion.

Third Touch on the hourly saw a retrace, I entered on the break-below of this, utilising the 15M for precision as this showed a small tight continuation.

Went with a slightly wider Stop for a 15M entry, 20 instead of 15 due to thinking this had the potential to move back up for a retest so didn’t want an unnecessary tag-in-out and drop situation.

Very happy with this forecast, analysis and entry.

Fortunately I was working from home so capable of catching such a tight entry.

This really shows, with conviction and True Risk reward the better entries.

Multiple stacked confluences on this and a solid setup & trade.

Management was very good, using previous resistance as trail stop area. Price did eventually move all the way to break even then full retrace so it was best to manage aggressively as I did while it was uncertain around the trendline area.


USDCAD

  • Third Touch HTF Resistance

  • Hourly Ascending Corrective Channel towards third touch

  • Hourly Rejection & Retracement 

  • Hourly Tweezer Top

Entry taken on on low of the retrace candle anticipating a break of the ascending channel.

Potential for a tighter entry but very happy with entry and management. 

Because quite aggressive with management towards the Double Bottom zone, potential to lock in a little bit more profit but used previous highs on the Hourly as an inflection zone for invalidation if price was to reverse. Ended up being spiked out.

Q1 - January - Trading Performance Review

2019 kicked off to a great start in the currency markets, with Canadian Dollar related pairs providing ample opportunities to capitalise on early on in January, and mostly towards the end too.

In total, 34 Trades were taken in January; 14 Winners, 18 losers and 2 Break Evens, equating to a 43% strike rate and closing out on a 14.6% Return on Investment.

(The number of losers is actually a little bit off here, as these are inclusive of just below ‘Break Even’ trades through either spread or slippage, with a more accurate figure of 15 losses.)

(Capital privatised for obvious reasons)

(Capital privatised for obvious reasons)

Through the 5 weeks in January, there was only a single negative week of -3.01%.

The 15 Minute Timeframe has been utilised throughout January, with greater emphasis on this timeframe brought forward on the 4th week as by this time a significant amount of time on backtesting the inclusion of this timeframe had been done.

Utilising the 15 Minute Timeframe has been incredible in boosting both trading results, but also providing better entry opportunities and removing any emotion of ‘Fear of Missing Out’ once a move has begun, as usually a 15M continuation opportunity presents itself after the confirmation.

Selection of Trades

As there was 34 trades throughout the month, I’m only going to discuss a selection of these trades; The best, good trades that resulted in a loss and avoidable ones.

(Please swipe, or click the images to scroll through them to see outcomes)

USDCAD - WIN

This trade was taken on the first week of January 2019.

There was this consolidation period seen on the hourly, unable to break above resistance and with the Higher Timeframe Structure looking prime to move to the downside, I was obviously looking for SELL setups.

After a small Impulsive Candle on the Hourly, I looked on the 15M chart to see a very nice consolidation and tight ascending structure. I decided to place an entry on the break of this ascending channel with a 15 PIP Stop - targeting the start of the Correction for around 10%.

This position was a little mismanaged, with the Higher TIme Frame (HTF) sentiment as backup, I should have been less aggressive with my trailing stop placement to allow ‘breathing room’. As eventually I was tagged out the market by a PIP for it to carry on in the direction for another 10%+.

GBPUSD - 0.03% LOSS

This resulted in a very small loss by a manual close, due to hesitation with the pattern due to the flash crash, this actually ended up moving on another 3% without me.

Tight consolidation/continuation flag after the impulsive retracement after the crash, was looking at this as a continuation to the upside.

I was triggered in but price stalled and didn’t quite breakout, where I lost conviction and decided to manually close.

GBPJPY - -1% LOSS

Similar sentiment and analysis as GBPUSD but GBPJPY, looking for that continuation from the previous week.

Descending Channel within Bull Flag formation, looking for a retrace off of the Third Touch of the Flag.

Entered as a Risk Entry (as this hadn’t breaked the descending structure) - was tagged in and price immediately dropped back down, to evolve into a deeper pattern.

GBPJPY - 1% WIN

Carrying on from previous analysis, the loss had just lead to a deeper evolved structure, and took another position on the retracement looking for break of the descending channel within the flag.

No real follow through around the resistance zone of the Flag and decided to lock in profit on a break of the Ascending Corrective Channel.

NZDCAD - -1% LOSS

Daily Descending Structure, with Hover/Bull Flag formation at top of Daily Structure visible on both the Hourly and 4 Hourly. Entry was taken on the 15M for a clearer 2nd Bottom Flag formation.

Tapped in and price moved a little bit, but not much room to manage effectively by moving to Break Even, until eventually dropped straight down.

A valid trade, but would probably avoid in the future and look for the Risk Entry within the pattern rather than a break of the larger structure. Or a continuation after the break of the larger structure.

EURUSD - 0.5% LOSS

Bear Flag continuation pattern after break of Rising Wedge pattern. Tight consolidation on Hourly, took more evolved Flag Pattern from the 15M.

Understanding that EURUSD price action was looking like it was falling in a descending pattern I accepted the Risk, also HTF wasn’t really showing a huge amount.

After the break, I moved to 0.5% Risk, but price retraced straight back up evolving into a deeper flag.

Valid setup, but would avoid in future - the Higher Probability Setups are earlier on in the move and this had a higher probability of evolving into a deeper structure if it didn’t break impulsively and convincingly.

EURAUD - 1.5% WIN

Ascending formation into Double Top on the Hourly, within an Arch into Double Top within the Ascending Channel.

Entry taken on the 15M retrace/Double Top rejection.

Price Broke the Ascending Channel but retraced and took me out, I had trailed my Stop towards the break of this channel as an obvious inflection point.

USDCAD - 0.5% WIN

Break of Ascending structure within correction, Falcon Flag formed and looked to take a Risk Entry on the 2nd Top of the Flag, with the consolidation and deceleration around this zone.

Price broke down and I moved to 0.5% as at this point, I felt the initial trade would be invalidated and likely to be evolving into another deeper structure or expanding formation.

Position 7 - Open : Close.png

USDCAD - 6.32% WIN

With evolved structure from previous trade into an expanding triangle formation, took an entry on the 15M retrace at previous highs Double Top with a 20 PIP stop.

Very happy with this trade, and a great lesson in not being put off from a previous trade closing out and always looking for the next opportunity and reading what the market is telling you. Not being scared by a loss or Break Even and always taking the next trade that presents itself.

Position 1 - Hourly - Close.png

NZDCAD - 3 WINS

Final Trade on this is still running into Feburary so no ‘closed’ to show just yet.

HTF 3 Touch structure was the filtering mechanism for taking this trade. Ascending Structure within the Flag formation, looking at this as a continuation to the downside.

Hourly Ascending Structure, actually hesitated on the initial 15M entry on the Ascending at the top of structure within the Hourly ‘Hover’ Pattern, but took entry on the 15M continuation on the impulsive break down. (Another lesson on always looking for the next opportunity and the 15M always presenting another entry the further up it is in the move).

Second Position ended up in a deeper pullback and I was taken out due to the Spread, something out of my control. But conviction in not being afraid of the impulsive nature of price action within the corrective structure, and taking the Third Test of resistance of the Hourly Ascending Structure with entry on the Retracement from the 15M Timeframe.

2018 - Year in Review

What a year 2018 ended up to be, huge up’s and down’s for me and many lessons learned.

Going into 2018 I had a couple of personal big goals I wanted to achieve for the year;

  1. Buy a house

  2. Own a Mercedes

At the start of the year, I was not in a financial position to even buy a house and being self-employed whether I even could achieve my first biggest goal, but I had to make it happen.

At this point, I had no idea how to even go about purchasing a house! With lots of hard work and the luxury of being self-employed I’ve been able to achieve both of these huge goals.

Here’s a short breakdown and review of my 2018; The Good, The Bad & The Ugly.

  • Started the year with a Ski Trip to Les Gets with the boys

  • Saw Michael Mcintyre Live

  • Saw John Bishop Live

  • Hit monetary goal for house deposit & refurb

  • Accepted for a Mortgage

  • Offer Accepted on a house

  • Reached my first 1000 followers on Instagram

  • Completed House purchase & received keys in August

  • Attended first Falcon Manchester Meetup

  • Partner was diagnosed with Hogkins Lymphoma

  • Became vegetarian in August (still going)

  • Featured on Oberlo Blog regarding my Shopify success story

  • Published my Personal Brand website (the one your on ;))

  • Brand new Mercedes delivered in November this has been written down in my goals list & journal consistently for the last 2 years.

  • Reached 2500 followers on Instagram

  • Branded and soft-launched my next Ecommerce Business - Uninspired Boutique

  • Brand new kitchen fitted in new house

  • Brand new bathroom fitted in new house

  • Fully decorated and kitted out personal office & setup

  • Attending my first Property Investment course

  • Renovated entire house by November (4 months) and moved in end of November

  • Kitted out entire house with furniture, appliances & entertainment equipment

  • Read 12 books

  • Watched England vs Belgium in Brussels

  • Visited Bruges

  • Had my first 12% Trading Return Month

  • Backtested and documented/tracked data for all 10 pairs on 2018 Goal List

  • Developed Portfolio of go-to setups against all 10 pairs on Evernote

  • Written & Laminated Trading Plan

  • Built upon my Long-Term Passive Investment portfolio

  • Achieved all Trading Content Goals

  • Achieved my Second Certificate in Krav Maga

  • Launched Krav Maga club website

  • Visited Amsterdam for the 6th time

  • Attended Falcon End of Year party at the very top of the Gherkin

  • Met faces in person from the Falcon Community I’ve been speaking to for Months

  • My biggest financial earning year to date

  • Partner received all clear results from HL, and last treatment on 28th December 2018!

There was some goals I did not achieve this year, but upon reflection at the end of year, these never actually aligned with my values and interests which makes sense why they were never achieved.

Your goals should align with your actual interests, if the motive is just the results then naturally you will become a victim of shiny-ball syndrome.

Going into 2019 my goals are super lazer focused and these goals include:

  • Trading a substantially large acccount size

  • Become a Consistently Profitable Trader

  • Document my Trading Journey Consistently

  • Launch & document my Uninspired Boutique business

  • General house improvements and materialistic goals

  • Consistently Backtesting and evolving my Trading Plan

Before you even THINK about Drop Shipping, READ THIS BLOG.

Ok, let me guess, you’ve watched some YouTube videos on Drop Shipping…50k in a week on setting up the Shopify store!

2.5 Million within 1 month on Shopify!


I’m sorry to break the bubble, and excuse my french…but it’s bollucks.

I bet they’re piping on about AliExpress too?

The reality is this. These ‘Gurus’ are making money OFF YOU, NOT their stores.

Understand this, if you’re seeing $50k numbers within the first week…with a profit margin of around 15%, they would be forking out around $35k upfront for the products.

If you’re new to Shopify, well you don’t receive the funds immediately through Stripe (unless you take only PayPal payments)…therefore you cannot ‘dropship’ with the customers money.

This is not a zero-sum business...YOU NEED MONEY UP FRONT!

Apologies, that’s the reality out the way…let’s press on.

What should you be Drop Shipping?

Yes, it’s true, I did use AliExpress and I’m not completely against it but there is a few things you need to understand before going ahead.

The issue I see is the confusion around what Drop Shipping actually is.

Drop Shipping isn’t unique to Shopify, nor Ali Express. Drop Shipping is the business model of product arbitrage. 

Buying a product from a website and charging someone else a higher cost. It’s called being a middleman.

This can be done with ANY website. You could sell the promise of Ikea furniture for double the price, then go ahead and buy straight from Ikea and get them to send to the customer, while you pocket the difference.

Now you understand what Drop Shipping actually is, I hope you realise you can literally use any supplier.

AliExpress is an easy option, it interfaces in with software such as Oberlo and it’s ‘cheaper’…but don’t underestimate these cheaper costs  inevitably costing on your business.

Why is Ali Express, not so great? Let’s go through some of the negatives…

Even the quickest shipping method takes between 10-40 days to arrive to your customer. Want to build a SUSTAINABLE business? In the long run this waiting period is not going to suffice, you will lack repeat customers, which is integral to any business and you’ll be dealing with a hell-of-alot of customer queries and complaints!

Communication isn’t the greatest, therefore handling returns or being able to just pick up the phone and deal with someone is very hard. 

Quality is not assured!

Customs can cause issues and your customer may never receive their product!


In general, when dealing with AliExpress you always have that nagging feeling in the back of your head like…”is this actually morally right”.

What do I advise?

Seek out a supplier close to your native home! What I mean by this is if you live in England, source a UK supplier or at best a European supplier that has a European fulfilment centre.

Believe it or not, a lot of suppliers provide drop shipping. This should be the ‘mature’ level of business you should be aspiring to.

Unfortunately there isn’t any slick interface like Oberlo that streamlines the order process, suppliers will mostly be manual process of ordering. 

However some do take CSV’s (Spreadsheets downloadable by Shopify of your orders) and will take a bulk order payment. Add this into your processing time and you only have to deal with this job once a week!

The benefit of using national or close-to-home suppliers is the customer experience is increased ten-fold, but also delivery is far quicker, quality is much higher and any returns can be easily handled nationally - rather trying to deal with overseas shipping and determining whether the Chinese factory received the return.

Sending a return to China, you are trusting the supplier of their word whether they have or haven’t received your return. In most cases, they will deny to keep their expenses low and there is nothing you can do otherwise…besides jump on a plane to China!

The point I’m making is, it pays to do your research. 

Determine your niche, then find forums and national directories of suppliers around the products you want to sell. Just keep following the rabbit hole!

I’m not saying do not use AliExpress though! Just in moderation haha. It’s ok to have some products, but you need to make sure the return probability is very low and also communicate clearly delivery times and everything else that goes with AliExpress to your customer. Trust me, you’ll feel like a better human for it.


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Getting a Mortgage as a Freelancer

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Let me first caveat this blog post for legal reasons, I am no way a financial or mortgage advisor. This is not advice and nor do I advise you personally follow anything mentioned in this article without consulting a professional financial advisor.

If you’re like me, you’ve probably heard a good few times “You’ll struggle to get a mortgage” or “You need at least 2-3 years accounts to even be considered for a mortgage” or worse “You have no chance in getting a mortgage”.

I actually naively believed these myths and passed off the possibility of getting a mortgage in my position a pipe dream.

The key lesson here? Don't listen to others!

Fortunately, there are options for freelancers and if you’re a contractor even more options and benefits for us!

Just don’t listen to the hearsay or worse let that stop you from speaking to an advisor.

I actually put off speaking to an advisor for a couple of years, as I believed this bullshit and thought I would be laughed out of the door.

Let me assure you, you will NOT be laughed out the door or phone.

It can be a daunting thought to speak to advisor, personally I had no idea how to approach it.

I’m not the biggest fan of speaking to people in person, especially the thought of walking in a Mortgage Advisors office unannounced and asking to speak with someone.

Simply, finding a Local Broker and give them a call and explain your situation.

What options are there?

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To give you a bit of background before you do speak with a broker, let’s put you into a better position so you’re not influenced by the first advisor you speak to.

You have two options as a freelancer or contractor:

  1. Approach a lender as Self Employed with your Limited Company
  2. As an employee based on a day rate stipulated in a contract

I’m going to break down both approaches as they both have their pros and cons.

Self Employed Route

A broker who either isn’t aware of the other route or doesn’t have the lenders available, will usually propose this route.

I personally took a break the previous year and as a result my earnings would have been sporadic and therefore my mortgage affordability would have been lower as well as not clean accounts.

Depending on who you speak to, they may say a lender requires 2 years of accounts but generally they base it on your previous years turnover.

Also your payment structure may affect your mortgage application. My broker spoke of a client who turned over £2 Million and took a dividend the previous year of £500k and was still denied because she paid herself the base salary.

Taking this kind of mortgage does have benefits of receiving a lower interest rate, which could be why lenders are more stricter towards these borrowers.

The final disadvantage is you require at least a 25%deposit by some lenders, which means more money down and more time saving.

Of course, if you’re accounts stack up and you’ve got the cash, there are some more favourable mortgage products available.

Employed Route

Got a contract and a specified day rate in writing? Good news, you’ll be able to get a mortgage pretty easily.

The common misconception among contractors I’ve spoken to is a mortgage is not possible.

There’s actually a few lenders who consider you as permanently employees if you meet a certain criteria…

Your day rate needs to be over £250 a day and have a signed contract…that’s it.

From this, they multiply your day rate by 240 days to determine your salary, then will determine an affordability figure by again multiplying your salary by 6.

Let assume you’re ballpark day rate is £250, this is obviously the lower end of the spectrum and conservative but that will net you a salary of £60k with an affordability of around £360,000 to be borrowed.

These kind of lenders also only require a minimum deposit of 10%...not the 25-50% myths you hear.

Contrary to the alternative option, the available mortgage products will generally offer higher rates.

Don’t this detract you, there are techniques to lowering your monthly payments...

I was personally advised to take on a 2 years fixed term mortgage with an initial higher payback period (32-38 years) then after the fixed term remortgage to a lower repayment period. Taking this approach gives you time to ‘find your feet’ and determine your monthly spends and lower your cost of living compared to standard rental costs.

How to apply for a mortgage

First and foremost - You are going to need to speak to a Mortgage Advisor!

If you were employed, going straight to the lender would be a viable option....But if you’re reading this, I'm guessing you may be self-employed?

If I'm right and you are self-employed, a broker has access to a wide range of mortgage lenders and knows how to specifically craft your case to look desirable to lenders.

Doing this alone, you’re likely not going to succeed as you may slip up on some crucial positioning. 

When I first decided to purchase a house, I had no idea of how to approach a Mortgage Advisor....this stuff isn't taught in school!

I wondered whether you just walk into a local mortgage brokers shop front you see and was clueless what to even ask if I you did walk in or call up.

Luckily a broker was recommended to me so I could approach them from the position of being referred and was able to have a good chat and understand the process…unfortunately that broker ended up being a dead end. 

This actually ended up being a good omen!

The point I’m making is, don’t be afraid to explain your situation. If the broker is worth their sauce, they will be able to confidently advise you on an approach regardless of your situation, not scare you away.

Personally, I spoke with 3 mortgage advisors before settling with one. The first was put off by the fact I was self-employed, the second was an online mortgage broker that lacked good communication and the last one was fantastic and just got the job done!

My final broker told me every possible paperwork I may need then literally applied for the mortgage in front of me. There was no waiting around or uncertainty from the lender and requiring extra paperwork, everything ran smoothly and I was officially offered a mortgage within 3 weeks.

Alarm bells should ring if they say you’re case is too complicated and do not even propose the contract day rate route.

You need to think of a broker as an essential part of your power team. They make money through a referral fee from the lender so it’s in their interest to secure you a mortgage and fight your case!

Build a good relationship with your broker and you may be able to use them in the future for some property investment deals ;).