contract work = mortgage application problems?

nat_2

Dear all,

I found very useful informationa about house selling/buying on this forum, that helped a lot in the last two months (while in selling and house hunting stage) . That is over now and I am hoping that the stage of "mortgage board" would be as successful.

I would be grateful if any of you had similar experience and/or know if I would have problems when applying for a mortgage and could advise me on this.
Sorry for the length, but would like to give you the correct information

I am buying a house with my boyfriend. He is selling his flat while I am renting privatly. Our offer on house that we want to buy has been accepted and we have 3 mortgages in principle agreed, from which to choose.
We are waiting for mortgage application forms to arrive by post in order to fill in. One that we liked the most - by mortgage adviser No1 - is by Nationwide. The mortgage adviser No2 offered slightly higher Alliance and Leicester mortgage and says that nationwide would not like my contracts and we might have problems with it. Also, that Nationwide are slow with mortgage applications.

I am wondering if there are difficulties if applying for nationwide or adviser No2 wants us to go for his mortgage?

This is my contract situation:

My boyfriend is earning more money than me (almost double) and is permanently employed. I am a teacher, working on contracts extended every term, although I know at the beginning of the year that I will have the same hours till the end of the year, they still extend them every few weeks. I know that I will have a work from September and probably permanent fractional post with extra hours on contract to make up to the full time hours. For the last two years I had the same number of hours (actually few hours more) than the full time employed teachers. The problem might be that I am paid hourly rate and my salary varies every month. The finance services do not process all my contracts (they forget some sometimes, and process them the following month) as it happened few times this year.
I also worked in two schools for a while, but for the last six months I have been only in one (I have varied number of hours in this one for the last two years - now this is the only place of work).

Another possible problem:
I will not be working for two months this summer and will not be paid. I have saved money to have enough in these months, but am afraid that this might be a problem with the mortgage lenders.

I have and had no debts and believe that never missed any payments on anything - therefore I expect that my credit rating is very good.

Would this be acceptable for a mortgage lender and would payslips and/or bank statements be enough or would I need to provide more evidence of my working hours?
I spoke to the head of my department and he is willing to advise personnel (if mortgage lenders ask about my contract) to let the lenders know that I will be employed form Sept again, but they still did not make timetables of hours for the next term (Sept). I am applying for a mortgage next week and am afraid that not knowing how many hours I will work might influence the lenders decision.

Also, the personnel are quite hopeless and messed up my payslips already by their inefficiency and mistakes during the last year, that I do not believe they would do the single thing right and am very worried that such incompetent department might spoil my future by not giving the right information (or not giving information on time).

I am teaching subjects in which there is a shortage of teachers and there is no problem with finding work.
I had been offered a permanent position in my other school, but preferred this one and did not accept the job. I was told by my line managers (in the preferred one) that will have a permanent contract by next Sept, therefore I stayed. As usual, at the end of the year permanent contract is not sorted yet (although still talked about), nor are the hours for the next year.

That was the long story, to give you an insight.
But I got very worried by the advisers comments (from the beginning of the story).

The question is:

Would this contract situation influence decision on mortgage, or are the lenders more flexible and aware of teaching contracts?

We are putting deposit of 15% of the property value.

Thank you for your time.

Eagerly waiting for your replies.

herbiesjp

What rates are you looking for ?

Fixed, tracker, variable? - New rates have been coming out over the last week and some new ones are due next.

Both lenders mentioned have in my experience been slow, and both extremely "picky" about information they will and will not accept form an applicant. Fortunatley once you have built up a relationship with their sales manager a lot of issues can be resovled very quickly.

There are other lenders that will look at this sitaution for you with good rates.

Do yo have P60s?

nat_2

Hello herbiesjp,

Thank you for your reply

We looked and discounted tracker and fixed for 2 years with no penalties for changing the mortgage after 2 years. (repayment)
|The best we found was - fixed 4.49%. The tracker was the same.

I have P60, but don’t think I received p45 for the job left in January (only 6hrs anyway, but in the previous year had much more hours in that job).
I also worked in 3 places last year and is difficult to follow the payments for me. Maybe not for the lenders

We would be able to afford the bigger mortgage than what we asked for, but do not want to make our lives difficult with spending up to the limit.
The mortgage would be only little more a month (less than £100) than what we pay now separately (his mortgage + my rent)

Would that be a good point to showing that we could afford the mortgage payments or this does not matter much for the lenders?

We will also have an extra 10k for the extension of the house we plan to buy. At first we thought of adding this to 15% deposit that we will put down and get the loan for the extension, but, as there will be extra expenses when we move to the new house, decided to leave the money for work needed and not to overstretch with loan on the top of the mortgage.

I know that the mortgage will not be a burden for us, but how to show it to the lender?

Thank you again,

Regards,

nat

martinhp

Nationwide will write to your school to confirm that your contract has been renewed at least once and that they are likely to renew it again. If answer is yes to both questions then Nationwide will accept your income. Hope this helps

Fairdo_2

As MartinHP said, they should be fine if the contract has been renewed and they are aware of Teaching contracts and how they can work.

They also take your P60 as summary of earnings which can be helpful if your hours vary.

nat_2

Thank you very much all, for your help.

That reassures me.

Just looked at P60s, all in order, have to get heads of departments I work for (and will work for, again), to contact the personnel before the lender. Hope, the personnel does not mess it up.

Regards to all,

nat