Mortgage application - contract employment

mrfish78

Hi there

I'm hoping someone out there may be able to offer some advice?...

My wife and I are first time buyers with an ok deposit: 15% of the mortgage we're after. My wife is in permanent employment but my job is on an ongoing contract that gets re-newed every 6 months (has been this way for just under 2 years now).

As I am the main 'bread-winner' but classed as a contract worker, does anyone know if this will effect our mortgage application?

Sorry if this has been posted before but if anyone has had some experience of this it would be much appreciated!

Audrey_Wright

There is a chance for it yes. As you're not on a permanent contract, there is nothing that stops your employer to let you go after the six month period.
The mortgage lender will definitely notice it and question you're financial stability.

As far as to whether you will or not be getting the mortgage, it's not so sure.

I'd suggest two things:

1. Talk with your employer about switching to a permanent contract, or a written consent about your future ties together.

2. Talk with your wife about her being the main person the mortgage is given to. That way the main carrier will be more stable in the eyes of the lender and you will be viewed as more of financial support. You will still be given the hard questions of "What happens if your contract is not renewed?", but it will carry less decision value.

KiKi

Audrey_Wright wrote: »

There is a chance for it yes. As you're not on a permanent contract, there is nothing that stops your employer to let you go after the six month period.

There is once he hits two years.

OP, your employer cannot just get rid of you after you have had two years of continuous service with them. You are then, effectively, a 'permanent' employee with the same employment rights as any other 'permanent' member of staff.

Of course, proving that to a mortgage lender is a different matter, but it might help you if you can tell them that! From an employment point of view, and depending on the relationship with your employer, I'm not sure I'd raise the issue of moving to a 'permanent' contract; they may investigate, and realise that as soon as you hit two years, you have the same rights, and decide they don't want to allow that and end your contract sooner.

mrfish78

Thank you for your responses very much appreciated and has given me plenty to consider!

A permanent contract isn't possible at the moment unfortunately, but I've been told that my employer may hopefully be able to provide a letter that states my long term future with the company so hopefully that may help my application.

I guess different providers view contractors differently, so we might need to look around to see who may be able to provide us with a mortgage.

chanz4

sounds like they are not planning to keep then, use and abuse type of thing

davidmcn

Speak to a broker, some lenders aren't too bothered particularly if contract is being continually renewed.

Anatidaephobia

When we got a mortgage last year, I was on a fixed term contract and neither Halifax nor Nationwide actually asked either of us if our jobs were permanent or not. They asked how long we had worked for our employers (over 2 years, for both of us) and obviously required payslips and contact details etc. But they didn't question the details of our contracts nor ask if the positions were permanent.

The mortgage advisors at Halifax specifically told us to answer their questions only and not volunteer extra information. They said they would ask us exactly what they needed to know.

Whether or not the new rules for mortgage lenders will now change this, I don't know.

mrfish78

Thanks again for all your comments.

Thanks Anatidaephobia - the original broker we saw didn't really ask about contracts etc either and I've heard before that Halifax generally are mainly interested in your earnings and length of employment rather than type of employment.

Cheers everyone.

Thrugelmir

mrfish78 wrote: »

my job is on an ongoing contract that gets re-newed every 6 months (has been this way for just under 2 years now).

Does your existing contract now take you over 2 years service?

mrfish78

Thrugelmir - 1 year 6 months at this point in time (I thought it was nearer 2 years but got my dates wrong).

patricia..xx

Definitely see a good broker. We had the same issue (except I am the higher earner). Some banks wanted at least 18 mths left on the contract, others been in post at least 6 mths, they all had different rules. In the end it was easier to exclude my husband altogether but we were lucky that we were in a position to do that. I have no doubt we could have got a better rate through a broker, but we were very specific in wanting an offset deal.