One furloughed, one fixed-term contract, can we still get a mortgage?

journosam

Me and my partner are looking to secure a £90,000 mortgage on a shared-ownership property (£110,000 share, £20,000 deposit). I'm currently on furlough but have a definite start back date of 1st January which means our current joint earnings are only £26,900. If I wasn't furloughed it would be £31,000 but I understand that means nothing to lenders until it's actually happened. If you use all the online calculators they suggest we'd easily be able to borrow £90,000 but of course they don't take into account the fact I'm on furlough. My partner earns £10,500 per annum, £5000 of which is on a fixed-term contract that runs out in March but is almost guaranteed to be renewed (she's a teaching assistant and they can't do without her). £3,000 of her salary is also from overtime. 

We've seen our dream house in a dream location but is there any possibility anyone would lend to us right now given our strange circumstances?

K_S

@journosam With regard to your income being considered, if you can get a letter from HR confirming a return date and salary there are lenders who may take your normal basic salary for affordability purposes.

ACG

Have you also put in rent on the share you will not own as a commitment? 

As has been suggested, if you have a definitive return to work date in writing, there are lenders who will consider it.
For the FTC, I think you may struggle - not impossible to use but to use it jointly with your furlough income coudl be tricky and even then you are probably not going to be able to use the overtime. 

MWT

journosam said:

We've seen our dream house in a dream location but is there any possibility anyone would lend to us right now given our strange circumstances?

I would suggest that you talk directly to a mortgage broker to go through the exact details and see what they say when they have the full picture.

It sounds like your partners salary may be more difficult with both a fixed term contract and overtime earnings which presumably are not guaranteed?

... but still worth talking to a broker...

journosam

Think I'll have to discuss with a broker. Frustrating situation because her contract renewal is almost certainly guaranteed as are my future earnings from January. Her overtime earnings are also guaranteed, she does the same hours each week, every week without fail. 

Thrugelmir

Lenders will base decisions on the circumstances at the time of application. Not on future events that are as yet unquantifiable. 

ACG

Your income can be accepted with a letter from your employer confirming return date and income once returned. 

Your partners is a little more tricky, potentially doable but not a sure thing. 

[Deleted User]

Do you pass the housing associations checks and calculations on the current state of income?  

journosam

Thrugelmir said:

Lenders will base decisions on the circumstances at the time of application. Not on future events that are as yet unquantifiable. 

ACG said:

Your income can be accepted with a letter from your employer confirming return date and income once returned. 

Your partners is a little more tricky, potentially doable but not a sure thing. 

This is the problem, some mixed messages going on! If my normal salary was accepted then my partners issues become far less important and the problem could be solved. 

Meh123

I’m not a broker but my mate got her mortgage through during the 2nd lockdown whilst on a 3 week furlough. She had to supply confirmation from employer with her back to work date and that some other details. I’d assume it’s dependant on the lender and subject to change (like everything right Now) but it is possible.

ACG

journosam said:

Thrugelmir said:

Lenders will base decisions on the circumstances at the time of application. Not on future events that are as yet unquantifiable. 

ACG said:

Your income can be accepted with a letter from your employer confirming return date and income once returned. 

Your partners is a little more tricky, potentially doable but not a sure thing. 

This is the problem, some mixed messages going on! If my normal salary was accepted then my partners issues become far less important and the problem could be solved. 

I do agree, but I think a lot depends on how you read thrugelmirs post - it is correct. But presumably you can quantify your return to work date, in which case it is a future event that is quantifiable. 

The other thing is that if you look at the people with "I am a Mortgage Broker" in their signatures - none of us have ruled out being able to place it. I dont do shared ownership mortgages personally so I am only replying generically (ie in principle it wont be a deal breaker), I have no idea whether there are shared ownership lenders who will accept your circumstances. I know JMA does more Shared ownership mortgages than I do (as does probably every broker) so it is probably worth speaking a broker with experience in shared ownership.