Points to note before applying for a Fixed Term Contract Mortgage
Applying for a mortgage on a fixed-term contract is slightly different from temporary contract mortgages that we have in our previous guide.
First of all, you need to do your research and look for a deal best suited to your profile. Every mortgage lender offers have different lending criteria that you need to consider. It’s quite common that you don’t meet the affordability criteria of every mortgage lender. It is also true that not everyone has time to do their research for term contract mortgages, where a financial adviser could help you by doing that research for you. At needingadvice.co.uk Ltd, we have specialised brokers with knowledge of applicable mortgage rates from various lenders. We can help you in quickly deciding the lender with the most appropriate mortgage term.
Applying to multiple lenders once for your term contract mortgage
It is worth noting here that you should not apply to multiple lenders in one go for your term contract mortgage; it will limit your chances to secure the deal. Every lender goes through soft or hard credit searches on your application, decreasing your overall credit score. So, it’s better to do your research and start your application with one lender at a time. Always ensure to go for an affordability assessment before starting your application. Many mortgage brokers could help you in your affordability assessment for a term contract mortgage.
People often apply for multiple lenders when they got rejected once, which results in many hard searches for credit checks on your profile in a short period, affecting your credit history. If you hire a specialised broker before starting your fixed-term contract mortgage application, you will be saved from making such mistakes that could result in adverse credit.
Mortgage on a fixed term contract Employment
Getting a loan when you are on fixed-term part or full-time employment raisessome concerns for most lenders. The reason is that this type of employment is less predictable. Lenders think that How will you pay the mortgage payments if your contract ends and you can’t get additional work.
Lenders will also consider the mortgage term and interest rates that you have requested, along with your deposit amount. There are additional lending criteria that you also need to consider for such a mortgage. If you are applying for a loan with fixed term contract employment, you might need to consider the following:
- You can provide the previous relevant employment contracts in your name.
- Provide up to date accounts of your finance.
- Provide your up to date annual income
- Current employment contract with details of your current position in the organisation.
There are also some additional lending criteria like your credit card ratings, secured loans etc., that you need to consider while applying. Better to contact for expert advice from a market broker.
Banks or building societies that might accept fixed-term contract mortgages
The appetite to lend to borrowers with fixed-term employment contracts can vary between lenders but working with a broker can help you identify which ones are more likely to approve your mortgage.
The brokers we work with have successfully arranged mortgages for fixed-term contract workers with the following lenders.
Various lenders could lend to borrowers with fixed-time contracts, but you may need a market broker to identify the ones with maximum probability. Some of the lenders are mentioned in the below list.
- First Direct
Frequently Asked Questions:
What kind of documentation will I need to provide lenders?
Every mortgage lenders have different requirements of the documents, which may or may not match each other. Some of the most basic documents required for the Fixed-term employment contracts mortgages are as follows:
- Passport or driving licence
- Proof of address
- Employment contract
- Bank Statements
To ensure that your mortgage application should pass without any issues, its better to contact a mortgage broker for financial advice. You may also need to provide the tax return for some mortgage applications. Multiple issues on an application can decrease the choice of lenders that you may get, so always train better in practice before going to the field.
What deposit do I need for a fixed term contract mortgage?
There are various ranges of deposit size available similar to a permanently employed person. It means that 5% and 10% deposits options are available for individuals with a fixed term contract. Most of the options will depend on the time and the length of your contract available.
Will gaps in my work history be an issue?
Yes, gaps in your work history may create an issue in the mortgage application. But gaps that could be explained by redundancy, travelling and family matters are accepted by specialist lenders.
Can I apply for a mortgage even if this is my first ever job?
You can also apply for a mortgage if you have your first job with a fixed-term contract. Some lenders may want to look for your work history.
How long do you need to be left on a fixed-term contract to get a mortgage?
Different lenders have various policies regarding this. For example, some lenders may only need three months left, but they will also check if your contract was extended in the past or not. On the other hand, if you have more than six months left on your contract, you may get better mortgage deals and offers. To find the most suitable deal on your application, you need to contact a financial expert for mortgage advice.
Do you need to have already had a contract extension to get a mortgage?
Yes or no, some lenders look for your one year on a fixed-term contract, and if it is extended before, then there are high chances of considering your mortgage application. But, at the same time, some lenders may also consider without a minimum time on the contract.
Is a fixed term contract a permanent position?
The fixed-term contract and a permanent contract have similarities in lending rules, but you may need to contact a financial advisor to know further.
Do lenders also consider my current position for a mortgage.
Yes, lenders might consider your current position or job in the organisation.
Can you get a mortgage during the probationary period?
Yes, you can get a mortgage during the probationary period, but you may need to contact a market broker before applying.
What if I fail the mortgage repayment?
Failure to mortgage repayment will result in bad credit for you.
Can bad credit make it harder to get accepted for a mortgage?
Yes, bad credit could adversely affect your current and future mortgage application. It’s better to check your credit score before starting your mortgage application.
Is it easy to get a mortgage if I don’t have bad credit?
Yes, avoiding bad credit could give you a better mortgage rate.
Is there any minimum requirement for your fixed term contract mortgage?
Yes, there are minimum requirements that you need to consider. A mortgage broker will be able to help you with your application.
Do lenders also consider a basic salary requirement as lending criteria?
Yes, some lenders could also consider your basic salary as one of the criteria.