On a temporary contract but have a large deposit

Freamon

Quick question for those in the know. What are the chances of someone on a temporary work contract (they are 6 months into a 9 month contract, no guarantees of a permanent job at the end) getting a mortgage at about 30% LTV (i.e. a very large (70%) deposit), borrowing 3x their salary, or slightly over?

Edit to add: total purchase price is 235k and the purchaser is a FTB with 160k deposit (inheritance).

themull1

How could you afford the mortgage if you didnt have a job?

Freamon

themull1 wrote: »

How could you afford the mortgage if you didnt have a job?

Good question. I suppose there's a chance the person I'm referring to would find another job.

But what I was really wondering is whether the bank would worry about this, given the size of the deposit.

In the good times, I seem to remember hearing about non-status mortgages for people with big deposits. Just wondering if those were still around.

Yorkie1

There are no non-status mortgages around any longer.

I am no expert but I can't see the bank lending you £75K if you don't have any current prospect of repaying the mortgage in 3 months' time.

property.advert

Run his contract through his own Ltd company and tell the lender that he earns £50,000 (or whatever you want) per annum. Don't open the company at your home address nor be a director of the company yourself. Use these guys http://www.madesimplegroup.com/

Get http://www.payroo.com/ to work out your "net" salary and then simply pay that into your bank from your company at month end a few times.

You can add to this package as much or as little as you wish.

Burridge60

property.advert wrote: »

Run his contract through his own Ltd company and tell the lender that he earns £50,000 (or whatever you want) per annum. Don't open the company at your home address nor be a director of the company yourself. Use these guys http://www.madesimplegroup.com/

Get http://www.payroo.com/ to work out your "net" salary and then simply pay that into your bank from your company at month end a few times.

You can add to this package as much or as little as you wish.

And get done for mortage fraud.

You need a track record. One year wont be enough.

The days of lenders living the "contractors" dream are ebbing away.

Freamon

Burridge60 wrote: »

And get done for mortage fraud.

You need a track record. One year wont be enough.

The days of lenders living the "contractors" dream are ebbing away.

But with such a low LTV won't some lenders offer a mortgage anyway, safe in the knowledge there's almost no chance of them losing money on a repossession?

property.advert

Burridge60 wrote: »

And get done for mortage fraud.

You need a track record. One year wont be enough.

The days of lenders living the "contractors" dream are ebbing away.

Not quite. No-one suggested using the company as proof of income but there is absolutely nothing wrong with taking up employment under a contract for £XYZ where you do not own any of the equity.

Me thinks a closer reading of the actual questions asked on a mortgage application may be in order. There is no need, as there is with an insurance contract, to disclose information which you think they may need over and above that which you are requested to supply.

In any case, any fool knows that reported profits are never the true picture. If they were, you should fire your accountant.

Meeper

Horrendous advice from property.advert. Pay no attention at all.

Regarding contracts, the general rule of thumb will be that if someone is on a fixed-term contract but it has already been renewed at least once and the employer can indicate that it is more than likely to be renewed again at the end of this term, there will be some lenders who will consider.

Speak to a competent mortgage adviser who should be able to point you in the right direction.

Freamon

Meeper wrote: »

Horrendous advice from property.advert. Pay no attention at all.

Regarding contracts, the general rule of thumb will be that if someone is on a fixed-term contract but it has already been renewed at least once and the employer can indicate that it is more than likely to be renewed again at the end of this term, there will be some lenders who will consider.

Speak to a competent mortgage adviser who should be able to point you in the right direction.

Thanks.

When you say "some lenders", are we talking a limited number of specialist lenders who will charge very high interest rates? Or might some of the more mainstream lenders be able to help?

Also, does the low LTV make any difference to this?

Wh05apk

Meeper wrote: »

Horrendous advice from property.advert. Pay no attention at all.


Speak to a competent mortgage adviser who should be able to point you in the right direction.

Spot on Meeper, I think speak to a "competent" mortgage advisor says it all!

If you own more than 15% of a company, as you would if you followed property.adverts advice, lenders will want to see accounts of the business, which you would not be able to produce.

Lenders on the whole now lend on affordability, so deposit is largely irrelevant, if you want someone to lend on the security solely try a pawnbroker.