Zero hours contracts are not uncommon nowadays, as employers are reluctant to commit to a fixed contract or a minimum number of hours every week, especially in industries where work can ebb and flow. As a result, there is less certainty that an employee on a zero hours contract would consistently earn the income to make repayments month to month, so most lenders decline applications for mortgages for zero hour contracts.
Fortunately, this leaves a gap in the market for specialist lenders who are flexible and adopt a more understanding approach. A zero hours contract does not mean the employee earns zero all year and, as such, they should be eligible to borrow a certain amount. With a track record of 12 months’ income, it is possible for certain lenders to consider an application, providing that the income is sustainable and that work is likely to continue to be available. For professionals on zero hours contracts, the length of working history required may be less.
What do you need to be able to apply for a mortgage on a zero hours contract?
• Evidence of the past 18 months of your employment history and latest P60
• 3 months’ worth of payslips
• A letter from your employer estimating the minimum and maximum hours available for you to work per month can also be considered
• The usual lending criteria also applies
Unfortunately, if you are employed on a zero-hours contract it is going to be a little bit more difficult for you to get a mortgage due to the financial insecurity that the nature of your employment represents but it is certainly not impossible. Being on a zero-hours contract is not a reason by itself to be turned down for a mortgage application. However you may need to undergo through a more stringent application process than, for example, someone who is on a standard full-time contract.
Make sure you have evidence of your earnings, how long you have worked for your employer and evidence that your contract has been renewed because any lender or mortgage broker will need to have proof of your ability to pay for the mortgage.
Here at The Mortgage Hut we are mortgage brokers who strive to help people who would otherwise struggle to get a mortgages to do so. With our knowledge and expertise we are able to find the best mortgages for people in all financial situations, no matter what their income or contracted hours. Don’t let your zero hours contract hold you back from getting a mortgage any more – call The Mortgage Hut and let us set you on the road to a high street mortgage today.
The Mortgage Hut provide face to face mortgage and insurance advice from our branches located in Southampton, Eastleigh, Winchester, Basingstoke, Andover, Newbury and London. We can also provide help and advice over the telephone - just give us a call on 0330 303 2640.