It’s a common misconception that those with a zero hour contract will not be able to successfully apply for a mortgage. This is because lenders will insist on a stable income source, however, each lender will have a different set of criteria to meet.
Can you get a mortgage on a zero hours contract?
Updated: 1st June 2020
The short answer is yes you can.
Obtaining a mortgage on a zero hours contract can be difficult, depending on your circumstances. However, as we have mentioned above, each lender will have a different set of criteria for you to meet.
Unfortunately, as a zero hours contract is a less stable form of income, the lenders may look at that less favourably, compared to those with a permanent contract.
Zero Hours Contract Mortgage – Key Points
- How long you’ve been in your current contract for
The majority of lenders will insist on a minimum of 12 months working in your current position. This does depend on your particular employment sector.
- Your experience prior to your current contract
If you can demonstrate that you have been working in your particular industry for a long time, this will increase the likelihood of you being accepted.
- What sector / role you’re working in
Certain professions are more favourable than others, for example, doctors and carers are looked at more favourably compared to other industries.
Mortgage lenders for zero hours contract
You may have attempted to obtain a mortgage through a high street lender previously and been rejected because of the zero hours contract. However, we have access to over 70 lenders and each lender will have different criteria.
Rather than waiting two weeks for an appointment with just one lender, why not book an appointment with one of our experts today and we can search the market for you.
Buy-to-Let Mortgage – Zero Hours Contract
This circumstance may be slightly more difficult, again, it really depends on a number of circumstances. Whether you’re an experienced landlord or this is your first buy-to-let, it can still be a tricky application.
In this case, certain lenders may require a minimum level of personal income, illustrated using pay slips or company accounts for example.
It’s likely that the lender will want to see a history of income of at least 12 months. This would be the same with a first time residential mortgage as well as a buy-to-let.
Book Your FREE Appointment
If you’re looking for advice on the best options you have for an HMO Mortgage, simply get in touch. Arrange your FREE appointment. You have a choice of telephone, Zoom or face-to-face if you are local to our head office.
What level of deposit do you need for a zero hours contract mortgage?
As you may be aware, the higher your deposit, the lower risk you are to the lender. However, it is very much possible to be accepted with a 5% deposit. This does depend on your credit rating and borrowing history.
If you can illustrate to the lender that you have a positive credit history, you are more likely to be accepted. If you have an impaired credit rating as well as a zero hour contract, it is more likely that you will need a higher level of deposit, such as 15% for example.
YOUR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.