Mortgage approved in principle, but my job contract runs out March 2012

trailerfluff

Hello

My husband and I are late first time buyers ( both 40) , and have a 30 K deposit for properties priced at 150 - 155k. We have had a mortgage agreed in principle based on our joint income with repayments based on affordability as we wanted them to be lower than what we currently pay in rent, with full knowledge that potentially the mortgage payments can rise above rental.

Whilst my husband has a full time permanant contract, I am currently on maternity leave, from a full time fixed term contract postion that ends march 2012.
I have been with the same employer for five and a half years, and whilst there is a good chance the contract will be renewd this can not be confirmed at this stage.

Do I need to tell the mortgage lenders that my contract is tempoary ? Does having temp contract means automatic refusal, or is each case considered on own merit?

Is there any other way round this as apart from a loan of 75% LTV , as on our deposit this prices us out the market completely . We are already looking at low end of market anyway! Being on maternity leave with reduced pay is not a problem to the lender as I am returning to work, ( tho undecided if full time ). If I'm working or not working we would still be paying rent at a rate comparable to mortgage repayments, so would this be taken into consideration ?

If the LTV was 75% or less then the lenders do not contact our employers, just take p60 and payslips, which would be ideal in the circumstances. Anything greater than 75% LTV the mortgage company will contact our employers to check status. My gut feeling is to tell mortgage company about fixed term contract as dont want to have offer on house accepted, only to have mortgage turned down ! :eek:

Any help very much appreciaited.

hcb42

yes, of course you must tell them of all material facts, including temporary work

jojorose

If mortgage is agreed in principle and you get as far as the checks and through other side I would not worry. Do you think you could still make the payments in the event of not being in work?

My last mortgage was non status, i had four different jobs, maintenance, etc and even though my application was spot checked and I had lumped all my income together and called it one salary, they still gave it to me because of the size of the deposit! Its about your ability to pay.

dwsjarcmcd

A mortgage in principle means that the lender has agreed to your request, subject to completion of a full application form and verification of what you have disclosed. This usually includes an employers reference and I'm not sure why you think that anything below 75% does not require verification. I would be surprised if a lender told you that as it would just make them a 'fraud magnet'

As a matter of interest, from your post it seems to me that when you got the AIP you never disclosed you were on a fixed term contract anyway, so nothing has actually changed.

Unless your husband can cover the loan on his income, I think you will be rejected come what may. Your only option is to tell them and have a discussion if possible about your individual situation.

trailerfluff

jojorose wrote: »

Do you think you could still make the payments in the event of not being in work?
.

Yes as would be paying same or more in rent anyway if I'm in work or not, so have allowed for this in the amount we want to borrow. Thanks for useful post :0)

trailerfluff

dwsjarcmcd wrote: »

I'm not sure why you think that anything below 75% does not require verification. I would be surprised if a lender told you that as it would just make them a 'fraud magnet'

Unless your husband can cover the loan on his income, I think you will be rejected come what may. Your only option is to tell them and have a discussion if possible about your individual situation.

Hi, husband could cover repayments on his salary, but would not get approval for full amount of mortgage on his salary alone. Yup - lender told me about different LTV rules which I was surprised about as thought would all be referenced. Never mentioned employment status as naively assuming loan granted on ability to pay.

dwsjarcmcd

trailerfluff wrote: »

Hi, husband could cover repayments on his salary, but would not get approval for full amount of mortgage on his salary alone. Yup - lender told me about different LTV rules which I was surprised about as thought would all be referenced. Never mentioned employment status as naively assuming loan granted on ability to pay.

You can't assume that they will not make checks, or at least you shouldn't. You WILL need to complete a full mortgage application where you will need to disclose your employment status.

If you don't it's fraud, sorry.