Zero hour contract

neilneilorangepeel

I made an offer on a flat, £39,000. I have £24,000 as deposit, applied to my bank for a mortgage of £15,000 over fifteen years, which works out at about £24 a week. Everything seemed fine, until they found out I recently moved onto bank staff at the hospital where I've worked for over a year, and they said no, sorry, no zero hour contracts. 
My question is, are banks able to take mitigating factors into consideration (eg I've worked in the same job for over a year but only recently moved over to bank because I can get more shifts therefore earn more (my bank statements prove this), the mortgage is so tiny that if I ever lose my job I could get a paper round and that would pay for the mortgage repayments, etc etc, or do banks always simply follow a rule such as "no zero hours" with zero flexibility? I'm just wondering if there's any point in trying to speak to anyone higher up in the bank who could explain what the risk is. (I mean, ultimately isn't this more like an opportunity than a risk - I fail to make the £24 weekly payments and they get to repossess my house and make an instant £24,000 profit ...?)

eddddy

Maybe speak to a mortgage broker and explain your employment situation. They might know of lenders who would consider you.

In fact, if you google 'zero hours contract mortgage' you get a few results popping-up. (But beware of dodgy mortgage brokers who might charge you a fee to look for a lender - but then say they can't find any, but keep your fee anyway.)


FWIW, banks aren't allowed to make a profit out of repossessions. If they repossess and sell the property, and if they get more than you owe them - they give the extra money back to you.

AdrianC

Ultimately, the bank are free to set whatever criteria they like.
If they don't want to lend to people with zero job security, they don't have to.
The only thing they can't do is discriminate on any of the protected grounds in the Equality Act. Employment status is not one of those.

Can you move back on to a "proper" contract, at least until such time as the purchase is done, then go back to zero hours if you wish?

hippocrates1

Could you get a bank loan instead of a mortgage?

saajan_12

neilneilorangepeel said:

I made an offer on a flat, £39,000. I have £24,000 as deposit, applied to my bank for a mortgage of £15,000 over fifteen years, which works out at about £24 a week. - for such a small loan, might some sort of bridging finance or unsecured loans work, over a shorter period? Many mortgages will have minimal loan amounts, so that'll narrow your market. 
Everything seemed fine, until they found out I recently moved onto bank staff at the hospital where I've worked for over a year, and they said no, sorry, no zero hour contracts. - some will have a fixed policy on the type of risk they want to take on. You can try escalating, but it may indeed be a 'No'. 
My question is, are banks able to take mitigating factors into consideration (eg I've worked in the same job for over a year but only recently moved over to bank because I can get more shifts therefore earn more (my bank statements prove this), the mortgage is so tiny that if I ever lose my job I could get a paper round and that would pay for the mortgage repayments, etc etc, or do banks always simply follow a rule such as "no zero hours" with zero flexibility? I'm just wondering if there's any point in trying to speak to anyone higher up in the bank who could explain what the risk is.

(I mean, ultimately isn't this more like an opportunity than a risk - I fail to make the £24 weekly payments and they get to repossess my house and make an instant £24,000 profit ...?)- Its not a profit, they would repossess, sell, deduct the outstanding mortgage balance + costs to carry out the repossession, and then return the balance to you, so no profit. 

Best bet is to speak to a broker to find a lender who will lend based on your circumstances. Alternatively, given the small size there may be other forms of unsecured financing available. The interest rate will likely be higher, but if you can borrow over a shorter timeframe and have lower setup fees as they don't have to do a survey etc, then the overall cost may still be better. 

moneysavinghero

Surprised you were even able to find someone who would give you a mortgage for such a small amount.

I mean, ultimately isn't this more like an opportunity than a risk - I fail to make the £24 weekly payments and they get to repossess my house and make an instant £24,000 profit ...?

If the bank have to repo the house they don't get to keep the whole of the house. They sell it and use the proceeds to pay off whatever you owe them on the mortgage and any costs they incur from the repo process. Any money left over would be returned to you. The risk is that they won't be able to find a buyer for the £39k flat.

FreeBear

hippocrates1 said: Could you get a bank loan instead of a mortgage?

Been looking at an unsecured loan myself. Currently being offered one for 3.44% (from Lloyds) which is ridiculously cheap in my opinion...

neilneilorangepeel

Thanks for your responses. I will try to escalate but I imagine it's going to be a case of "computer says 'no'". I guess I will have to go down the personal loan route.