Does a zero hour contract really restrict us this much?

Gamehungry

Hi everyone,

Just looking for a bit of advice really, some background information. My partner & I are looking to get ourselves on to the property ladder, we're 20/25 respectively, we both possess a clean credit record & we're both full time employed!

When I say full time employed my partner works in the health/social care sector which means unfortunately she's employed on a zero contract hour. Now, she loves her job & she has a steady stream of consistent hours, never less then 30 & she's been ensured verbally that'll she'll always have 30+ hours. She's been with this company coming up a year now.

Over past 6 months she's earned on average £300 per week gross, that ties in with my income nicely & puts us in a position suitable for a mortgage. The first 6 months she was with this company she worked less hours however, due to her possessing two jobs, apparently we'll only need 6 months of wage slips so would a lender just average the past 6 months out to work out her current earnings?

I'm full time employed & earnt £20000 gross upto April this year.

We've been to see a mortgage broker who works with the estate agent we found a house & had an offer accepted with. According to the paper work we have, they offer mortgages from the intermediary market ranging from a comprehensive range of providers. They don't advise on products available directly directly from lenders. Does that cover the whole market?

Now the broker has come back to us with only two options due to the zero hour contract situation. Both are 5 Year Fixed Term, one at 5% with £1000 worth of fees, non refundable if it's a no & one is 5.4% with £300 worth of fees. Both are over a 25 year term, the first is £540 a month & the other is £580 a month.

The amount were looking to borrow is 90% LTV on a house priced at £105,000.

My question after all that, will the broker have likely explored all avenues & does the zero hour contract situation out us out of the picture?

Apologies for huge post, any advice appreciated!

Regards.

McKneff

cant help, but zero hours contacts incense me because there is no security, they should be outlawed, full stop.....


Good luck to you both....

Thrugelmir

Maybe worth trying to build a larger deposit. While at the same building up more employment history.

noh

McKneff wrote: »

cant help, but zero hours contacts incense me because there is no security, they should be outlawed, full stop.....


Good luck to you both....

Can't agree.
I have 3 zero hour contracts. They suit me. In fact it is the only way I will agree to be employed.

elsien

Except the hours can't be guaranteed. If they could, she'd be on a permanent contract. Clients needs change, companies lose business, hours and overtime get cut.
I don't know about mortgages, but I've done several financial references for part time staff for landlords, and the agencies refuse to take overtime into account even if it's been consistent for months.

Brock_and_Roll

Zero hours contracts are in effect little more than the kind of "day labour" that you used to see at places like the docks a century or so ago. Its a one night stand - no commitment on either side!

Of course the flexibility suits some employees and it certainly suits many employers, but they are no basis for a 25-year loan. The dock workers did not own their homes, they rented. So without a substantial deposit or other security, nothing is going to persuade banks in these more sensible times to lend in such circumstances.

amnblog

If you can get an offer at 90% with a zero hours contract you are on a result.

Gamehungry

Well I must say I expected to receive "some" bad news but I didn't expect the consensus to be a "no" full stop. Dear O dear!

If we were to even get anywhere with options that that are on the table do you you think we'd be in a better position to better the deal after the fixed term?

Looks a bit bleak doesn't it. If all fails we'll look put it on the back burner & build up a bigger deposit.

Thanks for the advice people.

Leon_W

I've just done a zero hours mortgage.


I'll admit, it was a nightmare but it did get offered.


You'll need at least 2 years history with P60's in my opinion as I don't know anyone that'll take less. That's not to say there are lenders that won't do it but I'm not aware of any.

amnblog

We did one with six months history but not at 90% LTV.

Gamehungry

We spoke with the broker again today, we've decided to submit an AIP to one of two lenders, no fees before we get a DIP so we'll go from there. We gave the broker all our documents this afternoon so we're hoping to hear from them soon. Nothing ventured, nothing gained & all that.

Two year fixed term @5% it's what's on the table, works out at £560 a month, by no means great but options are limited.

Don't envy the broker photocopying all that paperwork & sending it off, she hasn't been paid yet!

Thanks for the pointers to date people.