Mortgage as a Contractor

Squall Leonhart

I'm coming to a stage where I really need to start considering getting a mortgage plan in action, i.e:

-Start rigidly saving a set amount monthly, on top of the rent I pay*
-Close the online betting account (was only chicken feed money being bet on the rare occasion, but still)
-Ensure to meet payments on the credit card bill, and all other direct debits, i.e., mobile phone, etc.

*incidentally, I pay 500 a month in rent.. in cash... will the fact it's cash pose any issues?

Also, I pay 400 per month at present into a private pension fund, by direct debit I have set up myself outside of employment. Is this seen as an ability to put money away?

The one massive hitch I see to my abilities to secure a mortgage is the fact that I'm a contractor with a firm (though going by the Revenue link below, I am an employee, does this count...?!)

Link: http://www.revenue.ie/en/tax/rct/determining-the-correct-employment-status-of-a-worker.html

Reading the mortgages.ie website, I was encouraged by the first point under question 3, which states we are pleased to advise that some lenders will consider contractors where their is evidence of contractual work for over one year on a continuous basis and prospects for further continuous contract work into the future are strong, link below;

http://www.mortgages.ie/go/first_time_buyers/will_i_qualify_for_amortgage_

My question is, has anybody any experience with this, or anything to contribute?

I'm unmarried and have no children if that makes any difference.

PaulM1977

Hi Squall Leonhart,

What line of work are you involved in?
Mortgage lenders will look at contract work but it will depend on the industry as well as the length of the contract you are on and also previously. Has the contract work been with the same company or have you moved around in the last couple of years?


Thanks,

PaulM

Squall Leonhart

I do architectural work, primarily pharmaceutical. I am only in my current position since start of the summer (having previously been in the same sector with a different company for a number of years), but based on the work load, I see no reason why I won't be in steady employment in the near-mid term future or longer.

I know 'construction' is a word which automatically hurts chances of being given any money..

As for the length of my contract, there is no fixed length, again, I can see how this may not be too good. However, from my point of view, is there any such thing as a stable job? Just because you're on a 12 month rolling contract, or are 'full time', a place can drop you with a months notice.

PaulM1977

If you have been in the same line of work, i.e. architecture, then that will stand to you. Were you working on a contract basis with the previous employer too? As it is an open contract, this should help your case too.


With regards to your rent, I would set this up as a standing order/direct debit, this will be looked more upon more favourably by the mortgage lenders.
The contributions you are paying in to your pension are seen as being "good with your money" but if it is going in to a pension plan, you won't be able to get to that until age 60. Would you consider putting this in to a savings plan instead so as to show good affordability as well as being able to use it towards a deposit on any property you may purchase in the future.
Good option on the betting account, as this has caused problems for applicants with lenders in the past.

Thanks

PaulM

Squall Leonhart

Thanks for your responses.

I have been working in the same field continuously for 4 years now, previous position wasn't a contractor role however.

Was mentioning the pension payments because if needs be, I could halve my payments into that putting the extra over to a mortgage, though would rather leave it untouched as long as possible and not really on for the idea if cancelling it and directing it to a savings account instead, would rather front load that, as it's something I've only recently started paying in to.

Rent by direct debit would be a good idea, but the person I'm renting from doesn't want it this way... Not ideal.

Bank of Ireland: Helen

Squall Leonhart wrote: »

I'm coming to a stage where I really need to start considering getting a mortgage plan in action, i.e:

-Start rigidly saving a set amount monthly, on top of the rent I pay*
-Close the online betting account (was only chicken feed money being bet on the rare occasion, but still)
-Ensure to meet payments on the credit card bill, and all other direct debits, i.e., mobile phone, etc.

*incidentally, I pay 500 a month in rent.. in cash... will the fact it's cash pose any issues?

Also, I pay 400 per month at present into a private pension fund, by direct debit I have set up myself outside of employment. Is this seen as an ability to put money away?

The one massive hitch I see to my abilities to secure a mortgage is the fact that I'm a contractor with a firm (though going by the Revenue link below, I am an employee, does this count...?!)

Link: http://www.revenue.ie/en/tax/rct/determining-the-correct-employment-status-of-a-worker.html

Reading the mortgages.ie website, I was encouraged by the first point under question 3, which states we are pleased to advise that some lenders will consider contractors where their is evidence of contractual work for over one year on a continuous basis and prospects for further continuous contract work into the future are strong, link below;

http://www.mortgages.ie/go/first_time_buyers/will_i_qualify_for_amortgage_

My question is, has anybody any experience with this, or anything to contribute?

I'm unmarried and have no children if that makes any difference.

Hi Squall Leonhart,

My name is Helen from Bank of Ireland, we’ve a talk to here on Boards and I’ve just seen your post.

You seem to be well informed and know the main steps you need in preparation for a mortgage application for example keep up to date with direct debits. It’s important to set up a savings account and show regular and consistent savings.

We would recommend that you start savings in a specific savings account, to show your capability to repay your mortgage. Also it would be advisable to set up your rent payments by standing order.

People on a contract employment can be considered for a mortgage with Bank of Ireland.

For more tips and advice please see here.

Best of luck and if we can help you with anything else we have a talk to forum here on Boards.

Helen

Squall Leonhart

Thanks Helen, really appreciate your advice and comments.
Incidentally Bank of Ireland is who I currently bank with.