FTB Fixed-term contract problems

seabass90

Hi all,

I'm ready to start looking at properties to buy as a FTB. I have a large deposit meaning my LTV is around 68%.

I've been working in a particular public sector industry since January 2013. I earn around 23k. Unfortunately, the Government decided to privatise 70% of the service in 2014 and I fell into the 'private' side. I was on a permanent contract but was not happy about the likelihood of cuts this new private company was going to make so, in mid August 2015, I took up the exact same job (same salary etc) in the 'public' side on a fixed-term contract for 18 months. Although some people were shocked at me leaving a fixed-term post for a permanent one, I am MUCH safer in the public sector - i'm a civil servant so have a good pension and am generally treated better there. The private company have since announced 40% cuts.

Last week, I received an e-mail stating my contract had been extended from 16th February 2017 to 31st March 2017, probably to tie in with the financial year. I am going to be taking this up with my Union however, as management have been so confident about the security of our jobs (we do extremely similar things to staff on a band above us and so in a way are more safe as we are cheaper to employ but can do the same work). I've also never been given a reason as to why i'm on a FTC in the first place so will get my Union to investigate.

Am I absolutely bonkers to think someone would lend to me? I've read that Halifax consider people who have been 2 years in the same industry - i've worked in the same industry for 3 years so this should help me, right? Most banks seem to only consider people who have either done 12 months of their contract already (i've done 7) or have 24 remaining and I fall into neither of those categories. Would it help if I could add my Dad as a guarantor to my mortgage application? He is in full-time employment, is 59, and already has a paid off mortgage. Also, I have a second income working for the private company I was based with on a sessional basis. I do around 30 hours of work for them per month (sometimes more, sometimes less) which comes to £350 after tax per month.

Help!

seabass90

Bump! Any advice appreciated.

adamjames0690

Hi Seabass90,

With regards to your specific circumstances you should be o.k. It's worth bearing in mind that each lender is different.

The fact that you are employed on a fixed term contract until March 31st 2017 might have been a concern, however given that you have a proven track record in the same type of employment, this will be favourably looked upon. Should your application go to an Underwriter I would think that they would request your latest P60 to ensure that there has been no significant increase in your income. As a FTB you have a healthy deposit and therefore providing you meet affordability requirements and have a good credit history, I can't see you not being approved. The property will of course need to be suitable for lending and there can sometimes be jssues with this later in the mortgage process.

My advice would be to make sure you research the market well, or alternatively go to a broker who will have the expertise to help you.

As your employed on a fixed term contract your mortgage application may go to an Underwriter. As I stated at the start, each lender is different. I used to work as an Underwriter for a major lender and providing the Mortgage Advisor keyed your application correctly, it would have come to an underwriter to check your employment. Should this happen do not worry; An underwriter may want to carry out additional checks, such as search your credit file to ensure existing credit commitments have been maintained well. An underwriter may also look to see if you have a track record in maintaining a similar level of commitment to what your mortgage payment would be. If I had any concern I would ask for a minimum three months worth of bank statements to ensure that the account is maintained and no return Direct debits.

I would avoid adding your extra employment, unless you require your income from this job for affordability purposes, as most Underwriters will ask for a minimum 12 months payslips to prove that this income is sustainable. If they are willing to use it they would take an average. However an underwriter would be in their right not to use this income if they had any concerns. If required for affordability an underwriter would want to see evidence to show that this 2nd job was sustainable with your main employment. An underwriter would also wish to see that these types of work are in the same field.

Therefore I can't see there being any major issues from the information you have provided. For example if you passed the credit score with an A pass, good LTV, good credit file, proven track record of employment, proof of savings being built up and proof of sustaining a similar level of commitment, whether that be rent or putting the amount aside for savings, then I would have had no issue in approving your application.

It's worth bearing in mind that your application may never go to an Underwriter but if it does, do not worry. Provide him/she with the information they request and should everything be satisfactory, there should be no issues.

I hope the above helps answer some of your concerns.

Best of luck with your application.

Adam

Thrugelmir

seabass90 wrote: »

I've also never been given a reason as to why i'm on a FTC in the first place

Public sector is undergoing an efficiency and productivity drive. In many areas there's a cap on permanent head count recruitment.

seabass90

Adam - thank you so much for your very detailed and helpful response!!

Thrugelmir wrote: »

Public sector is undergoing an efficiency and productivity drive. In many areas there's a cap on permanent head count recruitment.

Yeah I understand that. However according to our company's HR policy, they are supposed to include the reason for the temporary contract on the actual contract itself!