Are you employed on a fixed-term contract and wondering if it would be possible to get a mortgage to buy your own home? Well, whilst it isn’t as straightforward as it would be if you were in permanent employment, with our expert help you’ll be able to save time and avoid the hassle of trawling through various lenders online or by email/phone, to find one which understands your situation and will consider lending to you.
As with any mortgage, lenders need to see evidence of affordability and there are lenders who will consider your particular employment circumstances. There are various aspects which they will take into consideration, for example:
- The length of contract you are on
- The amount of time remaining on your contract
- Whether or not you have previously had your contract with the company renewed
- How long you have been working on fixed-term contracts within the industry
- The type of industry that you work in
- Whether you’re self-employed and working for one employer, or are employed and working on fixed-term contracts for various companies
To support your application, most lenders need to see at least one year’s work history and evidence of income from employment; longer periods will be seen more positively.
If you’re planning ahead for your future, there are ways you can help make yourself a more attractive prospect for lenders:
- No lender will allow you borrow 100% of the purchase price of a new home. A maximum ‘loan to valuation’ (LTV) may be 95% but the more you can save towards the deposit, the lower the LTV required.
- Find out what your credit score is, and look at ways of improving it, e.g. make sure you’re on the electoral roll, close any credit accounts that you’re not using (e.g. credit cards, mobile phone contracts, store cards).
- Manage any credit cards you do keep, ideally repaying the outstanding balance in full each month, or at the very least repaying more than the minimum required – don’t miss any payments, and don’t be late!
- Keep evidence of your employment history, so you can demonstrate stability within your chosen field.
Borrowing to buy your own home when working on a fixed-term contract can be an ordeal, but here at Turney & Associates we have access to the whole of the market and after discussing your personal situation, will be able to identify which lender(s) will consider your application.