Newbie mortgage holder - do I need to inform mortgage company of job change?

triggerhappy_2

It seems obvious, and my natural inclination would be yes, of course you do, but I'm not sure that I necessarily want to. So, to the details:

I first got a mortgage in April 2010 and it was based on my current salary (I'm still in the same job), however I'm looking to move on from this job and the most sensible way to do that is to become a contractor. This change would up my salary significantly and massively increase my future prospects, but also increase the risk to the lender as I would be less secure in my employment. I know I won't go without work if I take this route (I have some niche skills), but of course the lender can't bank on that.

So, my question is - is becoming a contractor a terrible idea? How risky is it in terms of my home and the sorts of mortgage I could have? My current fixed rate ends in April 2012 which would be right in the middle of my first contract if I choose to do it.

Many thanks for any help

beecher2

You don't need to tell your present lender and when your fixed rate comes to an end, they won't check your income/credit unless you're applying for additional finance. If you move lenders, you'd need to prove your income etc

mike004

Don't bother telling them, if you're confident you can meet the monthly repayments. That's all they are bothered about.
If you're going to be making good money, start over paying on your mortgage as soon as you can!

triggerhappy_2

That answers my question, thanks both!

Just one more question - if I were to move lender, how difficult would it be to do so if 'd only been contracting for a few months? Would it just be silly to try when at the time I'd need to move my contract would be due to finish soon after?

Thanks again

handytips

You would have to leave lots more info for an answer to be given. Thats why people have to get qualifications to give advice !

dimbo61

If your became a contractor would you then be self employed?
If so then you may well need 3 years of accounts to be considered by many lenders but you should seek professional advice

triggerhappy_2

Fair enough. I wasn't looking for a definite answer - just a general advice as to whether it's difficult to get a new mortgage when in temporary work.

triggerhappy_2

dimbo61 wrote: »

If your became a contractor would you then be self employed?
If so then you may well need 3 years of accounts to be considered by many lenders but you should seek professional advice

Yes, but of course I wouldn't have 3 years of accounts if I started this next month. I needn't change lenders, but I would guess that staying with my current lender for the purposes of avoiding complications regarding my employment status wouldn't end up with me having a good deal. Not the end of the world, but I'd like to be a bit more informed before considering moving from permanent to contract work.

dimbo61

What I am trying to say is that you would be limited to your current lenders deals ( which maybe great!) and consider going for a 3/5 year deal that way in 3/5 years time you would have accounts if you wanted to change lenders