Getting a mortgage on a fixed-term employment contract?

BurnsieUK

Well, the situation is this;

I currently have a good job working as a civilian for the Police. However, it is a 2 year contract. My girlfriend is a uni studying to become a primary school teacher (and has already been offered a job and she is not even in her final year yet!!!!).
We currently live together although I pay all the rent (£500 per month).

If I was to try and get a mortgage would the bank tell me to go away? Would be looking for around £100,000.

The thing is – if my contract is not renewed (Sep 2011) then, if I had a house, I would lose it. However, if I was still renting and lost my job then I would have to move out of there anyway. So the difference is negligible (apart from fees etc) but ion the later case I pay £6000 a year into the coffers of some rich landlord.

Moreover, when my girlfriend graduates and gets a job (hopefully) she would be able to take on the mortgage if I have to get a less well paid job.

So, would the bank even consider me in the current market? Does it depend on the deposit percentage? And, as I might be seen as a ‘higher risk’ would that increase my APR?
Thanking you :money:

Cannon_Fodder

Not an expert on the types of contracts accepted by lenders, sure someone will be along soon.

But, on the 'buying vs renting' thing, the difference with the former is that you'll have to pay a 10% deposit, which is £10k you might not get back out if you have to sell in a hurry...in addition to giving £6k or so to a Lender for the interest...

luckyfool

in addition to you potentially being repossessed and finding your credit record ruined for 6 yrs plus, and if it is sold at repossession for less than the outstanding mortgage you owe the lender the balance.

Not trying to put you off, but you need to have your eyes open that there are definite downsides to the mortgage route, and its not as clearcut as you suggest vs. renting.

Conrad

Halifax, Nationwide and others can consider fixed term contracts but each case is individually assessed. As you say there is a risk for you to consider, but on the other hand people get made redundant every day - life is full of risks we need to negotiate.

If it were me I'd go for it if I had say 6 months income set aside in savings.

zzzLazyDaisy

BurnsieUK wrote: »

The thing is – if my contract is not renewed (Sep 2011) then, if I had a house, I would lose it. However, if I was still renting and lost my job then I would have to move out of there anyway. :money:

Either this is an April fools post, or you have not looked into this in any depth at all.

There is a world of difference between defaulting on a mortgage and having to move out of rented accommodation.

Out of interest, do you have a deposit saved?

EDIT - just to add, since you don't want to pay £6k to a landlord - have you worked out how much interest you will pay to the lender over the same period (for these purposes the lender is, in effect, your 'landlord')

beecher2

BurnsieUK wrote: »

The thing is – if my contract is not renewed (Sep 2011) then, if I had a house, I would lose it. However, if I was still renting and lost my job then I would have to move out of there anyway. So the difference is negligible (apart from fees etc) but ion the later case I pay £6000 a year into the coffers of some rich landlord.

You might feel the difference is negligible for you personally (and that's debatable), but the difference certainly isn't negligible for a potential lender.