Contract end date affecting mortgage

[GigiBronz]

I'd be more worried that the market is more likely to have a correction now than anything else.
But I've always been paranoid so that's that.

[PTP]

A quick google and you'll find a few lenders' criteria for day rate contractors and have an idea what to ask for. Here's Accord's:

Day rate contractors are acceptable for lending purposes if the following criteria is met:

* A maximum of 46 weeks income used from the current contract
* Maximum 8 week gap between contracts in the last 12 months
* Minimum income of £300 per day or £50,000 per annum
* Minimum 12 month track record of contracts with a minimum of 3 months
remaining on the current contract. If less than 3 months remaining on current
contract then they must have a 2 year track record of contract work
* Current and previous contracts covering the last 12 month period
* PAYE/Umbrella Co: latest 3 payslips/invoices and latest 3 months personal
bank statements
* Limited Company: latest 3 months business bank statements and latest 1 months
personal bank statement

[Becky at Power Mortgages]

I'm currently trying to get a mortgage.
The agency I got my current contract through issues all their contracts with an 'ongoing' end date, to avoid having to extend them. My contract began in October and may run for 1 or 2 years, depending on programme delivery.
My mortgage broker tells me that underwriters do not like contracts with an 'ongoing' end date, but was unable to tell me what contract length is preferred.
My agency is willing to issue me a new contract with a specified end date, and extend as needed, but doesn't know what to make the contract length - 6 months, 1 year, or 2 years.

Should I ask for an end date of 1 or 2 years - Oct 2020 or Oct 2021?

Does anyone know what length of contract is preferred, or doesn't it matter as long as its over a minimum amount?

Afternoon

We do at times see rolling contracts with no end date. This is generally fine with lenders as long as your end client/agency is able to provide a letter confirming an expected project end date.
Alternatively, if they are offering a contract with an end date, this is again acceptable with any length of contract as long as you have not had lengthy gaps in between renewals.
As always, it is beneficial for you to contact a broker who are specialists in this area.

[lukemg]

Just been through this with 25% deposit. Had no contract - couldn't get a sniff, scored a 3 monther, how do you want the cash Sir.
Jokes, but has done what I need it to.

[LondonManc]

Thanks for all the advice.

I'm in the public sector, working outside of IR35. IR35 contract assessment completed for every contract.

The agency issues ongoing contracts for all its contract roles as standard, regardless of the client. It's not something I've seen before, but they're a well known agency in the public sector.

Based on your feedback I'll ask the agency to issue me a contract that ends in October 2020.

As long as you explain it's for mortgage reasons, they shouldn't panic and find a replacement.....

[Domestos]

Thanks for all the advice.

I'm in the public sector, working outside of IR35. IR35 contract assessment completed for every contract.

The agency issues ongoing contracts for all its contract roles as standard, regardless of the client. It's not something I've seen before, but they're a well known agency in the public sector.

Based on your feedback I'll ask the agency to issue me a contract that ends in October 2020.

[simes]

I get your point but it's also perfectly normal to have rolling six month contracts

When in another thread that involved stress testing the CEST tool responses for all things Substitution, I also ticked Yes to the question about the current contract being a series of agreed contracts.

CEST didn't like that, obviously. So then I ticked No to the current being a series of agreed contracts (which illustrates most cases anyway), and splendidly I fell on the side of the angels again.

The definition of Rolling might need to be clarified for all things IR35, but I guess you get my point.

Anyway, back to mortgages.

[ladymuck]

No. Contract started in October, a six month end date would be April, not ideal for getting a mortgage. Go for one year, October 2020. If the lender is contractor friendly at all, that should be sufficient. If they aren't contractor friendly, you probably won't get the mortgage anyway.

I get your point but it's also perfectly normal to have rolling six month contracts

[WordIsBond]

Apart from that, I'd go for a 6 month contract, and make sure you have as big a deposit as possible

No. Contract started in October, a six month end date would be April, not ideal for getting a mortgage. Go for one year, October 2020. If the lender is contractor friendly at all, that should be sufficient. If they aren't contractor friendly, you probably won't get the mortgage anyway.

[ladymuck]

Is the project something that is never ending? Or are you BAU resource that will be there until they carry you out in a box? The IR35 implications are a discussion for another day, I'm sure you've done your due diligence.

Surely manglement have a clue as to when your job will be done?

Failing that, 6 months is fine as WTFH said.

[WTFH]

I'm currently trying to get a mortgage.
The agency I got my current contract through issues all their contracts with an 'ongoing' end date, to avoid having to extend them. My contract began in October and may run for 1 or 2 years, depending on programme delivery.
My mortgage broker tells me that underwriters do not like contracts with an 'ongoing' end date, but was unable to tell me what contract length is preferred.
My agency is willing to issue me a new contract with a specified end date, and extend as needed, but doesn't know what to make the contract length - 6 months, 1 year, or 2 years.

Should I ask for an end date of 1 or 2 years - Oct 2020 or Oct 2021?

Does anyone know what length of contract is preferred, or doesn't it matter as long as its over a minimum amount?

To be honest, you've got other issues to worry about:
1. IR35 - do you know if you're inside or out?
2. Expenses - are you claiming any?

If you have a contract with no end date, you are effectively a permanent employee. This will greatly affect how you are viewed by HMRC in terms of tax.

Apart from that, I'd go for a 6 month contract, and make sure you have as big a deposit as possible

[Domestos]

I'm currently trying to get a mortgage.
The agency I got my current contract through issues all their contracts with an 'ongoing' end date, to avoid having to extend them. My contract began in October and may run for 1 or 2 years, depending on programme delivery.
My mortgage broker tells me that underwriters do not like contracts with an 'ongoing' end date, but was unable to tell me what contract length is preferred.
My agency is willing to issue me a new contract with a specified end date, and extend as needed, but doesn't know what to make the contract length - 6 months, 1 year, or 2 years.

Should I ask for an end date of 1 or 2 years - Oct 2020 or Oct 2021?

Does anyone know what length of contract is preferred, or doesn't it matter as long as its over a minimum amount?