Getting A Mortgage With A Fixed Term Contract

Emz101

Hi All

I am hoping that someone will be able to give me a bit of advice.

My partner and I are in the process of buying our first house; we have a good deposit, good credit rating which has enabled us to get a mortgage in principle with HSBC. We are now sorting out the mortgage and had the first appointment with HSBC but before the application form actually got started they asked us about our contracts at work. I'm on a permanent contract but my partner is unfortunately on a fixed term contract for 3 years. He has just come to the 1 year mark in his job but as he hasn't worked for the company before HSBC said we could not go any further as there is no history of it being renewed unless his job was to become permanent.

My question is; will any of the lenders out there give us a mortgage? We've looked at some banks and some state conditions of the fixed term contracts where as some others such as Barclays don't mention it at all. It is quite disheartening when they say they can give us a mortgage and we take leave to attend these appointments just to be told we cannot go any further.

Any advice would be much appreciated!

MrJB

The best advice I think anyone could give you would be to get a decent whole market broker.

Emz101

Hi

Thanks for the advice, we did speak to one before we found out the work contract was going to be an issue so I will see what they say.

Bardo_Pond

We're in a similar situation but the other way round: husband on a permanent contract, I'm on a 2 yr contract which was due to expire this June but has been extended till end of March 2017.

We used a broker and he asked me if I had a history of working in the same sector for a number of years - which I have (this helped). We ended up with the Halifax - not saying this is the best option for you obviously but the broker knew the market well enough for our circs.

So yeah, use an independent, whole of market broker for sure.

cloo

I think there may be specialist mortgages for people in your position .

martinsurrey

Emz101 wrote: »

Hi All

I am hoping that someone will be able to give me a bit of advice.

My partner and I are in the process of buying our first house; we have a good deposit, good credit rating which has enabled us to get a mortgage in principle with HSBC. We are now sorting out the mortgage and had the first appointment with HSBC but before the application form actually got started they asked us about our contracts at work. I'm on a permanent contract but my partner is unfortunately on a fixed term contract for 3 years. He has just come to the 1 year mark in his job but as he hasn't worked for the company before HSBC said we could not go any further as there is no history of it being renewed unless his job was to become permanent.

My question is; will any of the lenders out there give us a mortgage? We've looked at some banks and some state conditions of the fixed term contracts where as some others such as Barclays don't mention it at all. It is quite disheartening when they say they can give us a mortgage and we take leave to attend these appointments just to be told we cannot go any further.

Any advice would be much appreciated!

To be honest, fixed term contracts over 2 years are very much like employment contracts, the only difference is if its not renewed the redundancy procedure is simpler for the employer (no need to pool).

https://www.gov.uk/fixed-term-contracts/renewing-or-ending-a-fixedterm-contract

more explanation

http://www.personneltoday.com/hr/terminating-fixed-term-contracts/

so I don't see why HSBC see it as any less secure than normal employment...

marksoton

From posts on the mortgage board it would appear HSBC like to cherry pick their customers and are considered fussy.

pinkteapot

We did EXACTLY the same thing. Had used HSBC mortgages for years. Were moving. I had previously been in permanent jobs and didn't think at all about the fact my then-job was a 2 year contract. Found a house, made an offer, phoned HSBC and got "we don't consider fixed-term contracts".

We were in a hurry so used a broker. What you need to do is ring round and find the lenders who will consider the salary. There are some. We were short on time so used a broker, as they'll know who those lenders are.

We ended up with Santander. They actually wouldn't consider my contract either, but they would lend us enough based on hubby's salary alone (HSBC were slightly short of what we needed).

Don't worry though - there are lenders out there who'll take you. We went with Santander as the rate was a bit better than the lenders who'd look at my salary, but you'll get a mortgage. You can re-mortgage to HSBC if the job goes permanent.

Annoyingly, I was made permanent just after exchange! :mad:

We kept the Santander mortgage for six months (you can't remortgage during the first six months of owning the house), then remortgaged to HSBC to save 0.5%. Frustrating though as we wasted the Santander application fees by having to use them for those six months. Still, got us the house.

If you don't have time or aren't confident ringing round lenders yourself, use a broker. They may have access to better rates than you can get anyway. HSBC don't sell via brokers so brokers have access to everyone's mortgages except HSBC, but for other lenders there may be broker-specific deals you can't access yourself.

Emz101

Hi All

Thank you for getting back to me so quickly!

Bardo Pond - thanks for the advice your case makes me a little more hopeful knowing we aren't the only one's in this position; we are hoping my partner's contract will be made permanent but it's hard to tell when there is still 2 years left. Do you think it is best to ask upfront whether a fixed-term contract will affect the mortgage application? Upon looking at some banks, they don't mention anything in regards to work contracts which leads me to think they won't ask but I feel this is a little naive of me. My partner worked for the same company for 3 years previously to his current company but it didn't seem to satisfy HSBC.

Cloo - do you know which banks do mortgages for people in our situation?

Martinsurrey - thanks for sending the links; we may not have had an issue with HSBC if my partner had been at the company for 2 years but as he has only been there 1 year that is why we can't go any further.

You are right marksoton! They must have money to burn!

Emz101

Hi Pink Teapot thanks for getting back to me, I thought this must've happened to someone else as permanent jobs aren't that easy to come by these days! It is frustrating that we have these "initial" appointments where they give you a mortgage in principle and then when you get to the application they turn you down. I wouldn't mind but they never ask you this during the first meeting so it would save a lot of time and effort just to ask this in the first place. We don't have a lot of time to sort this out so need to get a mortgage in place asap but appointments go so fast. Will definitely try a broker and see what they say. Will it go against us knowing that one of us has a fixed term contract though?

Guest101

remember after 2 years he gets full employment rights, after 4 years he's essentially permanent.


FTC aren't as simple as they seem.