Long Term Contract vs Permanent role for a mortgage

lihar

Hi, I am looking for some advice if possible;

5 months ago i left a permanent role of 4 years for a 1 year HOPEFULLY ongoing contract at a company I really wanted to work for. My predessor in role had been there 3 years and left to travel. As far as I'm "reassured", the role is needed and although no guarantee obviously, it is expected to continue to be renewed and they were looking for someone long term to fill the role.

So 5 months in and on a great wage, myself and my OH can afford to buy a place of our own instead of renting. BUT being a contractor and my contract emblazoned with the words TEMPORARY WORKER all over it, has obviously and probably rightly, frightened off the mortgage companies.

I'm wondering whether to jump ship now and try to find permanent work or whether to stick out and hope that my contract gets renewed again and then wait until i have at least another year under my belt here?

I do like the job and that counts for a lot but am I just making life more difficult for myself by staying here?

Any advice from those who know would be great. I have a 5% deposit saved so far, so i'm not sure if the companies are more tighter on things because of the value of lending? Ie if i spent the next year saving even more would it help.

lihar

anyone? :-(

watchoutworld

I'm in a similar position, contracting since April, originally on a 3 month contract but this has just been renewed for another year. Like you I wondered should I stay (it's a good job and a difficult market!) or look for a permanant job... at the moment I'm staying and just trying to arrange the mortgage.

I have been told by different advisers that the following things help:

A history of work (particulary contracting) in a similar role
A contract being renewed once or twice already (even if short term)
A letter from the employer stating the details - this can say contract, fixed term, ongoing but much better not to include the word 'temporary'. Nice if they can include the likelyhood of future extension but understand that most won't want to put that in writing.
PAYE contracters seem to be favoured.

I've found a house that I like so I'll be proceeding with an application on this basis - please keep your fingers crossed for me and I'll let you know what happens...

hcb42

Deposit will also be a factor...not many 95% mortgages about.

I personally would stick it out, CV continuity is as important for long term career andpresumably if you are contracting the pay is higher - more opportunity to save...

Yorkie1

hcb42 wrote: »

Deposit will also be a factor...not many 95% mortgages about.

I personally would stick it out, CV continuity is as important for long term career andpresumably if you are contracting the pay is higher - more opportunity to save...

I agree. 5 months is not long in a current position. If you spend another year or more getting your savings / deposit higher, that will mean a lower LTV and also more reassurance to lenders that the contract is likely to be renewed on an ongoing basis.