Mortgage help regarding fixed-term/permanent contract

db098

Hi there,

We are currently going through the process of applying for our first mortgage. I work at a university on a permanent contract but my contract also states that the project I am funded from ends in 3 years. I have evidence (non-contractual) that this would be extended for a further 2 years. This is common practice in academic work and I have been through several contract renewals (4+) with no break in employment for 5 years now.

A lender has recently flagged up the wording on my contract and classed me as a fixed-term contract worker, meaning they won't lend me enough. I am in the process of trying to convince them that this should not be considered fixed-term, a few points I am thinking of making:

- legally an employee working for longer than 4 years would automatically be put on a permanent contract (hence why I am on one!).
- the average UK employee stays at a job for 5 years, meaning the risk of dismissal/redundancy/changing job is the same for a 5 year fixed term contract and a permanent contract.
- I have previously had several contract renewals without any break in employment

I was wondering if anyone has any experience with this and advice that might help me convince them.

Thanks

[Deleted User]

Your contract has a fixed end date. It is a fixed term contract. No amount of arguing is going to change that.
Lenders have defined criteria so if it doesnt fit with that lender then go to one that does do it.

I work in a University town and see these all the time. Some lenders dont like it, some are fine.

Are you using a broker?

db098

Just to clarify, my contract does not have a fixed end date. It is an open-ended contract.

I am using a broker yes.

db098

And just to clarify further, the lender is saying it is a semantic difference and I should be classed as a fixed-term worker despite me being on a permanent contract.

xylophone

https://www.thisismoney.co.uk/money/mortgageshome/article-7443091/HSBC-makes-easier-mortgage-zero-hours-contract-bank-relaxes-application-rules.html

kingstreet

Income is normally evidenced by 1-3 payslips with no requirement for a contract.

Was fixed term or another option selected on the application rather than permanent?

Which lender are we talking about?

sal_III

Is there a reason to go for this specific Lender? Sounds like it's not worth debating it with them if they don't want your custom, just look for a new Lender and consider using a broker.

[Deleted User]

It all seems very strange, ive been thinking all day to try find a lender that restricts loan amounts based on employment type. Keen to find out what lender it is as ive never come across a loan being reduced for this reason before.

db098

Thanks for all your replies.

The reason I had to supply my contract (rather than payslips) is because I am moving jobs.

Is there a reason to go for this specific Lender? Sounds like it's not worth debating it with them if they don't want your custom, just look for a new Lender and consider using a broker.

It is with Nationwide and we do have reasons to use them. However, it seems we will have to go with another lender but I just wanted to see if it was possible to appeal the decision. We are using a broker, but good to get information/advice from other sources too. Also, considering Nationwide seem to be quite lenient regarding these matters, I'm assuming we will run into the same problem with other lenders too.

ive been thinking all day to try find a lender that restricts loan amounts based on employment type.

I have often found with online affordability calculators that selecting contract or permanent (if the option is there) does change the loan amount (quite significantly in some cases).

Soot2006

EDITED as I realised I misread something. Sorry!

sal_III

Is it an option to wait for the first 2-3 payslips to arrive before applying fro a mortgage?