Mortgages Uncovered

If you are having problems getting a mortgage, statistics show that you are one of four of would-be home buyers who are facing these problems.

In the last 10 years, to the amount of people working different hours being self employed etc. banks are less likely now to invest in people who do not have a standard nine-to-five job.

Now searching for the right mortgage is easier. Spokesman for Charcol Mortgage Brokers, Ray Boulger said:

“Ten years ago lenders would not accept contract workers, for example. Now they recognise that someone on a yearly contract, regularly renewed, may have more job security than someone on PAYE who could be sacked at short notice. And they now know there are certain industries where contract working is the norm. Mainstream lenders don’t like temporary workers generally, especially if they are working irregularly and don’t have much of a deposit.

A lot of people choose to work as temps because they can easily take a break when they feel like it. But if someone has been working full-time for one agency for several years they may be treated as if they were in regular employment but with different employers. Like the self-employed, they may be asked to self-certify how much they earn. It will then come down to how big a deposit they have. If you have a 25 per cent deposit, mainstream lenders such as the Halifax, Abbey, Royal Bank of Scotland, NatWest and Standard Life will lend to you.

One reason why lenders are more willing to consider people with less-regular employment is there is much more electronic information available from credit reference agencies such as Equifax and Experian. So they can assess your creditworthiness more easily. They will look to see how reliable a borrower you are. For example, you will get a better credit rating if you have five credit cards on which you repay the minimum without fail each month than if you have one card which you always pay off in full. I warn that you could be turned down if you are found to have held information back on your application form. They look at your income and existing outgoings to decide how much more you can afford to borrow. So it will look very bad if they see a loan on your credit file that you did not tell them about.”

The 500,000 temporary workers who are on Blue Arrow’s (one of the UK’s largest temping agencies) books were experiencing problems in getting a mortgage.

Head of Blue Arrow Financial Services, Gary Forster, said:

“We were losing reliable people because they were unable to get a mortgage if they continued temping. We now have a dozen lenders who will take on borrowers from us so long as they have been with us for three months, can show they were working for at least a year before that and are in an occupation where their skills are in demand. We can demonstrate that temping can be more secure than a regular job because we can always find work for temps.”

Muslim Mortgage products will accept mortgage applications with all sorts of other factors (including family members contributing), however, it is against their religion to be in a contract that demands they pay or receive any interest.

A Muslim mortgage product means that the bank buys the house and then lets it back over an agreed lease term. Each month you pay rent to the bank including payments towards the final purchase price of the house, finally becoming the owner when the last payment is made.

HSBC are now offering this type of hire/purchase mortgage scheme in 25 areas in the UK including London and Birmingham.

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