Fixed term contract - affect mortgage decision in principle?

jetblack61

Hi all,
We went to see a mortgage advisor at the weekend who has agreed a decision in principle based on our earnings and how much we want to borrow.

In amongst the things I meant to ask her is that although my partner has a permanent contract at work, I work in academic research and so by the nature of the type of work I do, I am employed on fixed term contracts for research projects, and that's how it goes. I forgot to mention this and am now concerned this will make a difference.

I've been in my current post since August (12 month contract), and have another contract lined up and funded from September (for 18 months) - I earn the highest salary, and I'm worried that this issue is going to make a big difference to what we can borrow.

Basically I've got certain income/job security until around mid/end-2014 and we're looking at properties now to find one to put an offer on....are our chances of getting a mortgage greatly reduced by me not having a permanent contract? (Which I'll never get in my line of work...)

Thanks in advance

Dave_Ham

It will make a difference depending upon the lender.

Who did you get the AIP with?

jetblack61

We went to Britannia just because we wanted some advice from somewhere, I have an ISA with them and they could see us on Saturday. We haven't settled definitely on them, but she said we'd have no problem with getting the money....but I assume she assumes we're both on permanent contracts...

The_J

Yes, that could be a problem with Britannia although your account conduct may help. You should 100% mention it.

Dave_Ham

Spot on - Brit. have great products, but are not that flexible.

They do not publish criteria I do not think as do not user brokers, although I fear they will not like these contracts.

Would pick up the phone quickly - be useful for us to know if you could update also..

Good luck

jetblack61

I agree - I've tried to phone her today and she's not in, probably won't be until Friday. I knew I needed to mention it and fully intended to, just with all the talking she was doing, it got lost...

I'm worried because there's no chance of me getting a permanent contract because of the nature of the work I'm in - is this going to be a big problem for every lender do you think?

Dave_Ham

Nope - you will be fine do not worry.

Your only consideration is that with flexibility around contracts comes slightly increased rates.

The lenders that will be happy with fixed contracts, almost always have higher interest rates than you would have been quoted by Brittania.

As J said though, good current account visibility will give you more of a shout.

Call there normal mortgage number, they will tell you at the very least the criteria on fixed contracts...

All the best

jetblack61

Thanks for this - I've just found this online too, which has made me feel a little better:

"Fixed term contract / temporary workers

These are acceptable where the applicant has been employed for a minimum of 12 months in the same line of business. References covering the 12 month period will be required.

Applicants must be in a current contract period with confirmation of renewal."

I found this on the 'Platform' website who state they are the intermediary lender of the Co-op group, so hopefully we'll be ok. But as you say, perhaps the rates will increase a bit to cover the additional 'risk' of my fixed term contracts...

The_J

Better to hear it from the lender's mouth. Platform are quite loose with criteria.