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Can I Get a Mortgage on a Fixed-Term Contract in London?

Fixed-term contracts were once considered to be more of a less conventional form of income, though nowadays they’re a lot more commonly found.

As a general rule of thumb, the only difference between this fixed-term contract employment and regular employment, is how the contract that you have is structured.

Regular employment generally will typically mean you have to sign a contract at the start of your employment, which will remain in effect until you are either terminated or you hand in your notice to the employer.

If you are employed on a fixed-term contract, this will mean you are only a contracted employee for a specific length of time, as opposed to permanently. That being said, you’re still classed as PAYE, which is similar to what a teacher on a per year contract.

Is it possible to get a mortgage on a fixed-term contract?

Yes, it is absolutely a potential option. It may be a little challenging if you are looking for a first time buyer mortgage in London, though we do still have mortgage lenders on panel who will consider these types of circumstances.

Current Contract Length

How long your current contract length is can have an impact on whether or not you can obtain a mortgage. If your contract is a short-term one, you may find it even more difficult to take out a mortgage.

The reason for this, is because you are not guaranteed any sort of long-term employment. Coupled with a large, long-term outgoing such as a mortgage payment, this could be a risk to a mortgage lender.

Most mortgage lenders will want to see consistent, longer term contracts one after another. This will showcase to the mortgage lender that you are likely to keep on with regular contracted work, which in turn will help you in maintaining your mortgage payments.

In addition to this, you can further increase your chances of having a mortgage application accepted by having written confirmation from your employer that once your contract has ended, it will be renewed with the same employer.

Breaks in Employment

If you have had or are currently having any breaks in employment, mortgage lenders may see this as a problem due to their uncertainty of whether or not you can maintain your monthly mortgage payments.

On the off chance you have had any significant employment gaps over the course of the last 12 months, you may not be able to get a mortgage. This is dependant on the mortgage lender and their own criteria, though a more sustainable income may work in your favour more with some lenders.

Further to this, what is defined as a gap in employment will vary per mortgage lender. Some will see a week as a gap of employment, whereas others may deem 4 to 5 months as a gap.

An expert mortgage broker in London will be able to check lender criteria and match you up with the most appropriate one.

What documentation do I need to get a mortgage on a fixed-term contract?

In order for a mortgage lender to consider accepting your application for a mortgage, you will need to provide them with multiple pieces of identification.

The types of documentation you will need to submit to a mortgage lender, include;

  • Passport
  • Driving License
  • Proof of Address
  • Proof of ID
  • Most Recent CV
  • Most Recent Employment Contract
  • Proof of Previous Employment (If Possible)
  • Last 3 Months Bank Statements
  • Last 3 Months Payslips

An expert mortgage advisor in London will be able to take a look at your documents in advance, to make sure it is all suitable for passing along to a mortgage lender.

If they require any other forms of ID from you, they will let you know so that you are more prepared for your mortgage journey ahead.

How much can I borrow on a fixed-term contract?

It is very likely that, providing you have a solid history of consistent employment, with very few or no gaps and a contract with a good amount of time left on it, you will be able to apply for a 95% mortgage, only putting down a 5% deposit.

Unfortunately, because it is deemed to be a risk to the mortgage lender, if your contracts are more short-term or you have some gaps in your employment, you may need to put down a much larger deposit in order to secure a deal with a mortgage lender.

Can you get a remortgage on a fixed-term contract?

Perhaps you are already a homeowner. If this is the case and you are on a fixed-term contract, heading towards the end of your fixed mortgage period, you may be curious of the options you have present.

It is at this stage that we would greatly recommend getting in touch with remortgage experts like ourselves and benefitting from remortgage advice in London.

This is because on top of the possibility of new deals that you may be able to access, there may well have been a change in your income. Maybe you aren’t working as often as you were in the past? Is your average income lower than it used to be?

It is elements like this that can have an effect on your ability to remortgage your property. Depending, you may have limited options, perhaps even with extra costs.

Enquiring for remortgage advice in London with expert mortgage advisors is definitely recommended ahead of jumping in to remortgage your home.

Book Your Free Mortgage Appointment

For anyone who is curious about whether or not it is possible for a home buyer or homeowner to obtain a mortgage whilst on a fixed-term contract, the simple answer to this question is yes, it is.

In order for you to have a much better chance of getting a mortgage with these circumstances, book a free mortgage appointment today with a dedicated mortgage broker in London and we’ll see how we are able to help you.


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