Mortgage on temporary teacher employment

lisaree

Hi wondering if somebody could let me know whether a bank would be willling to give you a mortgage on a temporary teachers employment.the money is going to be 39K p.a. but it only a 12 month contract but normally will last for longer. any knowledge greatly appreciated!!

drunkmonkey

You don't want to buy a house and banks don't want to give your money at the moment, In the paper today, houses could have another 40% to drop in the next few years..before things level out....

If you borrow 200k now, it might be only worth 120k in 2 years, that's serious negative equity.....

lisaree

i know dont want to buy at the moment. just wondering bout getting the mortgage if we need, have gotten two job offers but the permanent one is very far away but will have to take it if it means im definitely not eligible for mortgage on temp contract.

drunkmonkey

I don't think they'll give you much of a mortage on a temporary contract, they really don't want to lend you the money as they know you are bound to end up in serious financial difficulty if prices keep falling and intrest keeps rising...

They might give you 3 times your salary, around 90k, won't buy you much yet but could buy a lot in 3 years....

The_Conductor

To be perfectly honest- the likelyhood of securing a mortgage on a temporary contract is highly unlikely in the current climate. Most lending institutions have severly tightened their lending criterion, the multiples they are willing to lend have reduced drastically, for First Time Buyers- you're now looking at a max of 85% mortgages (if you can get them- more likely 80%), 5 Times main + 1.5 times secondary salaries, to a max of 35% after tax income- dependent on outstanding financial commitments.

You need to organise to meetup with an independent financial advisor to find out what your options are.

S.

ntlbell

if you're not going to buy in the next year or so as things are pretty bad, what difference does it make if they will or won't?

take the 12 months get started on the deposit and take a permanent job when you need to

orbital83

+1.
You shouldn't be thinking about buying a house till you have a secure permanent job. If your contract isn't renewed a year down the road and you're in negative equity by then, it won't be pretty.

If you haven't bought, then in this scenario you can head to a different part of the country to find work, or to a different country altogether, if things have got nastier.
The government looks like it's going to cut back on public spending.

My advice would be to spend the next year focusing on getting a permanent job, and building up a good deposit + slush fund (you should have six months salary saved which isn't put towards the house)

The risk is that property prices increase over the next year, but that isn't looking too likely.

slickmcvic

yeah,ya should be able to.
I'm a secondary teacher on a twt contract and loads of my collegues in the same boat all got em(one is building a pile for 400k!)
....I think if your permanent you can get more cash but if you stay in your job for 4 (I think) years you get upgraded to C.I.D Contract of Indefinate Duration which is more or less the same thing

The_Conductor

slickmcvic wrote: »

yeah,ya should be able to.
I'm a secondary teacher on a twt contract and loads of my collegues in the same boat all got em(one is building a pile for 400k!)
....I think if your permanent you can get more cash but if you stay in your job for 4 (I think) years you get upgraded to C.I.D Contract of Indefinate Duration which is more or less the same thing

Yes- the CID, is something that formally came in under the Fixed Term Working Act about 5 years ago (prior to that you could have a series of fixed term contracts indefinitely- which really was an excuse of a system for not making people permanent, when they were effectively permanent anyhow.

The problem is however that the lending institutions have massively changed their lending criteria for those on contract employment. If the OP is able to supply 2-3 years worth of P60s, or show tax returns for the appropriate period, its entirely possible that they get a reasonable mortgage offer. An example of the clampdown- two colleagues, both permanent civil servants, with a combined salary of 82k, now only qualify for a mortgage of 240k from Bank of Ireland (previously they had been offered 415k by the same branch).

Times have changed.

MonkeyWrench

smccarrick wrote: »

Yes- the CID, is something that formally came in under the Fixed Term Working Act about 5 years ago (prior to that you could have a series of fixed term contracts indefinitely- which really was an excuse of a system for not making people permanent, when they were effectively permanent anyhow.

The problem is however that the lending institutions have massively changed their lending criteria for those on contract employment. If the OP is able to supply 2-3 years worth of P60s, or show tax returns for the appropriate period, its entirely possible that they get a reasonable mortgage offer. An example of the clampdown- two colleagues, both permanent civil servants, with a combined salary of 82k, now only qualify for a mortgage of 240k from Bank of Ireland (previously they had been offered 415k by the same branch).

Times have changed.

415K to 240K is a massive drop in the amount they will lend you. I had thought that the figure would have dropped by maybe 50 grand or so but it does show really how times have changed.

smccarrick - Do you reckon the same above applies to people on IT contracts i.e they have to come up with a couple of years of accounts to secure a mortgage and if so what criteria do they use to determine the amount you can lend as a contractor on a daily rate?

I don't plan on buying at the moment in the current climate but may do so in a couple of years when the market may be a bit more stable..

Victor

smccarrick wrote: »

An example of the clampdown- two colleagues, both permanent civil servants, with a combined salary of 82k, now only qualify for a mortgage of 240k from Bank of Ireland (previously they had been offered 415k by the same branch).

This might be an extreme case, but this is potentially how much prices will drop - 42%.

Firetrap

If that's what's happening across the board, house prices are really going to drop. That mortgage is a 3x salary...

The_Conductor

Firetrap wrote: »

If that's what's happening across the board, house prices are really going to drop. That mortgage is a 3x salary...

The way Bank of Ireland are calculating it is 5 times the higher salary and once the lower. I'm not sure the reasoning behind using a multiple like that?

Firetrap

Ah. I was just doing a very rough mental calculation. Still a big fall though. Wonder what multiples a single person would get.