Many people believe that it’s impossible to obtain a mortgage if your sole income is derived from employment on a zero hours contract. Whilst this is a more precarious type of employment and does make obtaining a competitive mortgage offer more difficult, it is possible.
With the growth of zero hours contracts in the UK over the last decade or more, lenders appreciate that more and more people are likely to be employed on these less predictable contracts of employment. However, just because your employment contract might not guarantee hours of work every month (and therefore income) many employees on zero hours contracts might well be earning a respectable income month in - month out, despite the lack of formal hours in their contract.
It is, therefore, important to make sure that you make the best case possible when making your mortgage application. For example, some lenders might want to see at least three months proof of income. Others might need 12 months. Making an application to the wrong lender for your needs could be time consuming and costly, involving you in wasted effort and perhaps even damaging your chances of obtaining a mortgage elsewhere if you are rejected by a lender that was never likely to fit your circumstances.
Mortgage lenders will want to reduce their risk. This means that higher earners with skills are likely to be a more attractive proposition. So are lenders with a larger deposit, especially those with a Loan To Value of 80% or less. Having worked in the same industry for a decent period of time or, better still, for one employer for a good while, will help.
It’s also worth noting that many people borrow as a couple and if one borrower has a salary and the other has an income through a zero hours contract the impact might be less relevant. Also, where you are buying a property to let as an investment your income might have little or no relevance as some lenders in the buy to let market assess their lending criteria on other factors such as LTV and net rental income.
Therefore, when on a zero hours contract, it’s important to make sure you apply to the right lender for your circumstances and present your application in the most favourable light.
For an initial chat and a no-obligation consultation contact Mortgage Required, today.
Recent posts
Budgeting over the Christmas Period
4 days ago
The most wonderful time of the year can easily turn into the most expensive time of the year. Watching the pennies doesn’t mean that the Christmas festivities have to stop, following a few budgeting tips can mean you still have a special Christmas and don’t go into the new year in debt.
Preparing your home to sell in winter
8 days ago
December is usually a less desirable time to buy as many people don’t want to move over the holidays. However, prospective buyers do start to look at this time. Selling your home in winter may require a bit of extra attention to showcase your property at its best.
We look at why mortgage rates increased following the Bank of England's choice to reduce the bank rate, and should you fix now?
UK 2024 Autumn Budget: Housing
30 Oct 2024
On 30th October 2024 the Chancellor, Rachel Reeves delivered the Autumn budget which we had previously been warned would be “difficult”. Below we have summarised the main housing points.
Talking about money with kids
23 Oct 2024
In an increasingly cashless society, money is an intangible concept for children to grasp. In the days of coins and notes, kids could see money as something physical you require to purchase goods and services.
In order to help teach your children about money, we have listed some tips below;
Labour Autumn Budget Predictions: Housing
18 Oct 2024
The UK’s chancellor, Rachel Reeves will deliver the Labour government’s autumn budget at the end of the month, we take a look at what could be announced in relation to housing.
Recent research from Halifax has revealed the most sought-after locations for first time buyers in Britain.
The data which was taken from the Halifax House Price Index looked at areas outside of London where those looking to purchase their first property were buying. Despite high property prices and increased rates, these first time buyer hotspots have remained popular.
How can I look after my mental health?
7 Oct 2024
Taking care of your mental health means looking after your emotional, psychological, and social wellbeing. There are several ways we can practice self-care that will help to improve our physical and mental health. This can help to reduce our risk of illness, manage stress, and boost our energy levels!
More information
Trusted by
