First time mortgage but not in employment for 6 months

Del007 · 02-01-2016 4:28pm #1

I'm looking to get my first mortgage. I have well over the 10% deposit in savings.

For the last 4 months I have been in employment but prior to that I was unemployed for a few months. The bank require a bank statement for the last 6 months. Will the fact that I was unemployed for a few months have a massive bearing on my application even though I have significant savings?

Cheers for your help

NIMAN · 02-01-2016 4:30pm

It will. I honestly can't see you getting a mortgage if you have only been employed for 4 months by your current employer.

Saipanne · 02-01-2016 4:31pm

Are you permanent? Or still on probation?

Del007 · 02-01-2016 4:40pm

I'm on a contract.

I spoke with the bank on the phone, they never asked me how long I've been employed. They do require a P60 and a bank statement for the last 6 months. So there's no hiding the fact that I was unemployed during the year.

Cheers for the replies

Stheno · 02-01-2016 4:43pm

Del007 wrote: »

I'm on a contract.

I spoke with the bank on the phone, they never asked me how long I've been employed. They do require a P60 and a bank statement for the last 6 months. So there's no hiding the fact that I was unemployed during the year.

Cheers for the replies

Being on a contract will also not be in your favour, banks generally look for people to be in permanent jobs for at least six months.

Del007 · 02-01-2016 4:50pm

What happens if a bank reject your mortgage application? Can you apply again in a few months?

Stheno · 02-01-2016 4:59pm

Del007 wrote: »

What happens if a bank reject your mortgage application? Can you apply again in a few months?

Yes, but without a permanent job, it's likely to be the same outcome, unless you are a long term contractor and can show several years of being a stable contractor.

Del007 · 02-01-2016 5:02pm

Where I work, they employ people for 2 years then let them go for 6 months. I'm in my second stint with them, in between, I was working somewhere else but was unemployed for a few months.

syklops · 02-01-2016 5:14pm

Del007 wrote: »

Where I work, they employ people for 2 years then let them go for 6 months. I'm in my second stint with them, in between, I was working somewhere else but was unemployed for a few months.

Most contractors I know, indeed i was one myself for a while have their own company which invoices the client they do the work for. If you've had the same company for 4 years then you have in fact been "employed" for 6 years.

Some of the guys I know who do this long term, have their accounts set up in such a way that they get their salary paid by their company every month and they save up a surplus, and if they have a month where they are not required, they still get their salary amount paid and all their usual direct debits etc are unaffected.

Put it another way, if a builder comes off a job for Mrs Murphy for 2 weeks, and then goes onto another job, he doesn;t tell the bank he has only been employed for 2 weeks, because he has his own company.

Del007 · 02-01-2016 5:28pm

That situation is different to mine.

I'm employed with a company through a recruitment company and I'm on a contract. It's not possible for me to do what you suggested. Appreciate the suggestion though

syklops · 02-01-2016 5:34pm

Del007 wrote: »

That situation is different to mine.

I'm employed with a company through a recruitment company and I'm on a contract. It's not possible for me to do what you suggested. Appreciate the suggestion though

Look into it.

Stheno · 02-01-2016 5:55pm

syklops wrote: »

Look into it.

Sounds like OP is an agency worker, as opposed to a contractor, so it may not be possible for them to move to being an umbrella company type contractor.

Not a great situation to be in, having two year contracts, then being laid off for six months at a time. Sounds like the agency/company doing this are trying to avoid having to give out permanent contracts.

NIMAN · 02-01-2016 5:59pm

... and an employment situation that I'm afraid the banks won't entertain.

Del007 · 02-01-2016 6:02pm

Stheno wrote: »

Sounds like OP is an agency worker, as opposed to a contractor, so it may not be possible for them to move to being an umbrella company type contractor.

Not a great situation to be in, having two year contracts, then being laid off for six months at a time. Sounds like the agency/company doing this are trying to avoid having to give out permanent contracts.

Correct on every count. I'm working for a company through an agency.

They are avoiding giving out permanent contract but they do come up from time to time. More than likely not in the next 12 months though

syklops · 02-01-2016 6:03pm

Del007 wrote: »

Correct on every count. I'm working for a company through an agency.

They are avoiding giving out permanent contract but they do come up from time to time. More than likely not in the next 12 months though

What industry are you in?

Stheno · 02-01-2016 6:03pm

Del007 wrote: »

Correct on every count. I'm working for a company through an agency.

They are avoiding giving out permanent contract but they do come up from time to time. More than likely not in the next 12 months though

That six month gap between contracts will hurt you if the bank do a detailed look at your application which they most likely will.

Your best bet is to try for a permanent contract if they come up.

Any chance you could move to a different job with a permanent contract?

Saipanne · 02-01-2016 6:10pm

I don't see you getting a mortgage without a permanent position. Do you have any chance of getting one?

Del007 · 02-01-2016 6:20pm

Trust me, I have been looking for a permanent position elsewhere but so far I've been unsuccessful.

There is no chance of getting a permanent job where I am in the next 12 months.

I do have saving of 30% of the amount that they would give me if successful. They may look favourably on that.

NIMAN · 02-01-2016 6:21pm

Of course they will look favourably on a big savings pot, but its only one factor.

When they are considering your ability to repay the mortgage to them over 20, 25 or 30years, they look at a lot of stuff. A lot.

02-01-2016 7:26pm

Del007 wrote: »

Where I work, they employ people for 2 years then let them go for 6 months. ...........

Can't see you getting a mortgage in that situation. I wouldn't even apply for one with the recent break in your 6 months history.

Have a chat with a broker but if I was you I'd be looking to either getting a fulltime job somewhere else or consider other ways of contracting (which is no help unless you want to wait a year or two to buy)

If you really want to become a property owner the role you currently have in the company it's in doesn't cut the mustard.

On a brighter note having 30% deposit potentially is fantastic so all is not lost, spend the next few months actively sorting out the employment
situation.

I looked at your post history, I can guess where you work and I reckon it's 23 months not 2 years you get before the 6 months break, also the agency this is through who are on your payslips possibly is a big redflag to banks as to what the risks are.

First time mortgage but not in employment for 6 months

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