Fixed-term contract and mortgage?

kitrat

I am not hugely versed on mortgages yet, but I presume a bank/building society these days will not be interested in providing a mortgage for a couple, one who has a full time permanent job and the other has a full time but fixed term job (18 months)? I guess that both of us will need permanent jobs before we will be considered?

Thanks for any advice!

bigadaj

You would be considered but this is dependent on the size of your deposi, multiplier on one or both incomes, other debts etc, if you post so e of these details then you might get firmer opinions.

kitrat

Ok well we'd be aiming to have a 25% deposit (maybe 20% might be more likely), no other debts except student loans, one earning £20,000 (permenant job) the other £18,500 (temp job) - looking to borrow about £110,000 at the very most.

Not sure how the multiplier thing is going to work with the fixed term job thrown into the mix. Based on the lending calculators on bank websites we'd be offered more than enough money (far more than we want) but I think that is assuming you are a perfect customer in permanent jobs.

Thrugelmir

kitrat wrote: »

I guess that both of us will need permanent jobs before we will be considered?

Ask yourself the question. Can we afford the mortgage without the income?

A mortgage is a long term commitment i.e. 25 years. So there's no point in speculating.

kitrat

We can live on the permanent persons income - I'm not speculating at all. We've done that before paying rent payments of a similar figure to potential mortgage repayments. But that's not the question I was asking.

I'm in no way expecting to be able to get a mortgage in our situation, I just wanted to make sure that was the case so I'm not missing out here!

XJX

Hi there, try and speak to a Mortgage Advisor. I am a supply teacher so on fixed term contracts a lot and there are mortgages out there that will consider you. My mortgage advisor is pretty hopeful that they can get me one. *fingers-crossed*

kitrat

Thanks XJX. Do you think that it will influence the interest rate you will get or the amount that you can borrow?

XJX

As far as I know, as a temporary work you are at a higher risk so I believe the rates would be a bit higher. I'm not 100% sure on all the details though so I think a Mortgage Advisor would be your best option as they can work out affordability and various lenders.

kingstreet

Here's the criteria Halifax uses for contract workers as an example;-

Sub Contractors, Fixed/short term contracts and Agency workers

Applications will be considered from the above employment types if the customer has a current continuous employment of 12 months or more with 6 months of the contract remaining or the customer has 2 years continuous service in the same type of employment.

Evidence of their employment track record may be required.

Customers should be treated as self employed if they pay their own tax or sub contract to more than one company.

IT contractors

For all IT contractors whether employed, self-employed or utilising an umbrella company, we will accept the gross value of the contract as evidence of income. All applicants must have been contracting for a minimum of 1 year or employed in a similar business.

I would suggest speaking to an independent or whole market broker to establish which lenders are open to you and how you might get the best deal for you.

kitrat

Thank you for the help everyone!