Getting a mortgage as a contractor

[Pepsipepsi]

Do any single people have advice on getting a mortgage when not in a permanent job?

I work in a industry that relies on grants to pay staff wages. I'm currently on a project that has two years left and may get extended for another year. After that I'd hopefully get an internal job with the company (this is in my contract). But the sector is always first to have budget cuts and obviously don't know how corona will play out.
I got into this company just over a year ago by taking a paycut in the hopes I can work my way up.

I could probably get a mortgage and deposit together for £110,000. Which could get me a small semi or terraced house in my very rural area. The remoteness of my area obviously makes new jobs hard to come by. I would worry that if the project ends and I can't get a job in the company or a new full time job, I would have to sellup.

What would you do in my situation? I'm early thirties now and just seems it's getting later and later to become a homeowner.

Hopeful bump :)

I'm self employed. As is my husband.
Go to a good broker. Halifax are more sympathetic to self employed.
You need 2 years proof of income

Thanks for the reply.
I think I'm more worried about getting into huge debt and then not being in a position to pay it off. I don't have any family that could help. I probably would get a lodger to help out if things were looking desperate.
I was looking for advice if anyone was second guessing themselves like I am, but went for it and it worked out for them. How did you manage when you had to switch jobs or found yourself without income?

Yes the payments would be equal or slightly less to what I've paid. Hard to work out exactly as bills included in rent.

I'm so debt adverse though, the responsibility makes me anxious. My parents weren't homeowners and have both passed now. Everyone I know are couples buying. I don't want to wait for a partner to have secure housing.

I think my question is: if you were in a position to buy and comfortably pay a mortgage for the next few years would you do so and cross the new job bridge later or wait until your job prospects were more secure?

Halifax is the only bank that will lend to my OH that don't require 2 years of contracting. He's nearly at 2 years so we will have more chose Clydesdale as well I believe are ok with contractors as well.

I'm also risk averse, but these days hardly anyone has real job security anymore so this isn't as big an obstacle as it used to be. The rural location is slightly more tricky, but here Covid could be a (faint) silver lining in that remote working is likely to be more acceptable, thereby giving you a wider pool of potential buyers if you did need to sell. There's nothing to suggest that house prices are over-inflated/likely to crash in the short-medium term so I would be comfortable buying in your position. You're looking to buy below the stamp duty threshold so, even if your job situation forced a move sooner than you'd like, the costs of buying and selling really aren't that high - we found a fixed-price conveyancer for less than £1,000 in total (sale and purchase) plus the estate agent fees which are usually around 1.5% but negotiable. Provided you don't do something to trash the house's value, there's very little to lose. Pay off as much as you can as quickly as you can, as a hedge against market 'wobbles' if there's any danger of negative equity. In the worst case scenario, if the market crashed just as you needed to sell (highly unlikely) there's still a positive - you'd also presumably be buying in the deflated market and could pick up a bargain.

Whatever you choose to do, good luck!

Look at an offset mortgage. We got ours with Barclays.

In your position I would probably decide to buy, unless I knew my prospects of finding new contracts were low or that I might have to move to find something. I'd probably not overstretch myself, keeping the mortgage to a level that I could afford even if my income dropped a bit or it took me a month or two in between contracts.

I echo looking at Halifax, and considering a good broker. They're not necessary if your financials are straightforward, but I'd just started a fixed term contract when we applied for our most recent mortgage and the broker we used was great at knowing which lenders would be worth looking at.

I got a mortgage last year with Halifax with 1 year accounts as a contractor.

Talk to a mortgage broker.

Thanks for the good advice. I will look up offset mortgages and have a look into brokers. Thank you @winecrispschocolatecats and @doublehelix79 for alleviating my fears.

There are specialist mortgage brokers for contractors just do a quick google. You will likely end up with Halifax though!
Quick thoughts though - if you have a contract of 18 months then you’re more a permanent employee and subject to different tax and conditions. That goes for several extended contracts in the same or similar location too.
Best advice is to get on with finding a broker and seeing where you’re at.

I never heard of brokers until the last year, I didn't think a lot of people used them but I stand corrected. I have an account with L&C with a mortgage in principle but I'll look into others too.