Mortgages for agency workers

If you are an agency worker on a temporary contract then don’t be deterred about getting a mortgage.

You may still be able to get a mortgage as there are now mortgage lenders out there who will offer mortgages to agency workers with fixed-term contracts.

Even if you are an agency worker with an income that may be somewhat unconventional you may still want to speak to a mortgage broker to analyse what the possibility of you getting a mortgage is.

What information will you need to get a mortgage as an agency worker?

• A good credit score
• Evidence of pay and income
• P60s or tax returns for self-assessment
• Bank statements for the past 3 months
• Payslips for the past 3 months
• A mortgage deposit

What sort of agency workers could get a mortgage?

Most agency workers from a variety of fields can get a mortgage. Different mortgage lenders may, however, have different lending criteria and may not lend to people from a particular industry.

Your mortgage lender may be able to advise you on this.

Most agency workers will fit into this category:

• Trades and industrial
• Information technology
• Office and administration
• Medical and health professionals

What do mortgage lenders consider when looking at mortgages for agency workers?

Mortgage lenders will look at the below factors when considering to make a mortgage offer for an agency worker.

If your contract has been renewed in the past:

If your contract has been renewed in the past then mortgage lenders may use this as an indication that it may be renewed again in the future.

Are you on a fixed term or temporary contract?

As you can imagine, your fixed term or temporary contract does not provide a guarantee that you will be getting paid after a certain time frame and hence these types of contracts worry mortgage lenders as they cannot lend to you if you won’t be able to afford the mortgage in a few weeks or months.

Some mortgage brokers may be able to help you find mortgage lenders who are willing to lend to you with a fixed term or temporary contract.

Your Job title & industry

Your job title may make a difference when looking for mortgages as an agency worker. In fact, the industry you work in may also make a huge difference as different industries and roles have different career paths and many mortgage lenders will now take this into consideration when offering you a mortgage.

Length of Time in Your Current Job Role

When looking to get a mortgage as an agency worker, the length of time you have been in your current job role may have an influence on the mortgage lender as the longer you have had a job role, the more experienced you are and this will mean you have a more likelihood of securing a similar job role elsewhere or having your contract extended with your current employer.

To the mortgage lender, this just translates to a more stable income and this means they will feel much more comfortable making you a mortgage offer.

Some mortgage lenders may require time in your current role to be a minimum of 12 months, others 6, and others no minimum whatsoever, so long as your current role has been with the same company.

Anything less than 12 months with the same employer may provide challenges and make it harder but not impossible to secure a mortgage as an agency worker.

Have you had huge gaps in Employment?

Having huge gaps in your employment may mean you find it harder to find new jobs after a contract has been finished or terminated. Having a lot of gaps in your employment will also mean that you move from employer to employer too frequently and do not have a stable job.

This may make it much harder for you to get a mortgage as an agency worker although some mortgage lenders will consider you as long as you have a stable income.

There are mortgage lenders that will not consider you for a mortgage if you have had a gap in employment within the last 3 or 6 months.

Not all mortgage lenders define a gap in employment the same way. Some mortgage lenders will define a gap in employment as 1 week while others may define it as 4 weeks.

Your mortgage broker will be able to guide you and provide suitable explanations for any gap in employment so you can get a mortgage as an agency worker.

The Length of Your Current Contract

The length of your current contract as an agency worker will no doubt be one of the biggest factors mortgage lenders may look at when considering if to offer you a mortgage or not.

The longer the length of your current contract the better. This is because most mortgage lenders will be able to use this as an indication of how secure your finances are and will be over that term.

If your contract is fixed or short term, lenders will usually require a minimum of 6 months remaining on the contract while for some mortgage lenders the minimum will be 12 months.

You may still be able to get a mortgage even if you have 3 months left on your contract and some mortgage lenders may even consider 0 months left on your contract as long as the initial contract had at least 6 months on it.

If you are an agency worker with a more casual agreement where you have no fixed term or any defined term for your employment you may still be able to get a mortgage but most mortgage lenders will require evidence that you have worked with the same employer for at least 2 years.

There are 4 main types of contracts you could be on as an agency worker

You could be an agency worker on a probation period:

Being on your probation period as an agency worker does not mean there won’t be mortgage lenders who are willing to lend to you. The probation period is very common within certain job roles and can last for a few weeks and even up to 12 months for agency workers.

During your probation period, you may find that you earn less and you don’t have the full employee rights as your fellow work colleagues may have.

This can cause problems for mortgage lenders as you could lose your job at any time within the probation period and there are very few mortgage lenders who may lend to you during your probation period as an agency worker.

Some mortgage lenders may still lend to you during your probation period and a mortgage broker may be able to advise you on who these mortgage lenders are.

You could be an agency worker on a fixed term contract:

As an agency worker on a fixed term contract, getting a mortgage may be much easier than if you were on a probation period. The mortgage lender will look into your income in depth and your credit history to ensure you are creditworthy before they make you a mortgage offer.

Mortgage lenders will want to see your fixed term contract to confirm when the fixed term will end and some may want to see your CV to have some satisfaction in the fact that you may be qualified enough to easily find another fixed term contract.

Some mortgage lenders will also pay close attention to your past work to see if you have a history of getting fixed-term contracts and may lend to you on this basis.

You could be an agency worker on a short term contract:

If you are an agency worker on a short term contract and you want a mortgage you may find it much harder to get one as most mortgage lenders will question how you will make repayments on your mortgage during the periods when you are unemployed.

Some mortgage lenders may consider your case but will want to see your working history to ensure that you don’t have very huger gaps between contracts and that you have scored yourself new contracts on a regular basis.

If this is your first short term contract then getting a mortgage may be harder.

A mortgage broker may be able to advise you better as mortgage lenders deal with cases on a case by cases basis.

You could be an agency worker on a temporary contract

Temporary agency workers will have contracts similar to fixed-term contracts but a temporary contract will likely not be extended and will likely not have an end date.

If they have an end date then they are usually subject to change.

You may find it much harder to get a mortgage with a temporary agency contract but getting a mortgage could still be possible.

The type of job role you have can impact which mortgage lenders will look at your case as they will consider your future prospects and potential future earnings.

Can I Get a Mortgage on a Fixed Term Contract?

Yes, you can get a mortgage on a fixed term contract. Whether you’re on a fixed term contract or an employee in your probation period, there are a number of options to obtain a mortgage in these circumstances.

Can I get a mortgage as an agency worker?

Yes, getting a mortgage as an agency worker is certainly possible as long as you are able to prove to the mortgage lender that you have a stable income and future prospects as an agency worker.

Can I get a mortgage on a temporary contract?

Yes, you may be able to get a mortgage on a temporary contract although the requirements for such a mortgage may be strict and the mortgage lenders who offer mortgages on a temporary contract may be few.

Can you get a mortgage for an agency worker with bad credit?

Getting a mortgage for an agency worker may very well be possible but with bad credit, this could potentially make the job a tad bit harder.

Bad credit could include:

• A CCJ
• An IVA
• A debt management plan
• A default
• A bankruptcy
• A home reposession

Government schemes for agency workers

You may also be eligible to use certain government schemes to boost your mortgage deposit or reduce the total cost of you buying a home.

They are:

• Lifetime ISA- gives you a government bonus of £1,000 if you save the maximum £4,000 a year.
• Help to buy ISA- gives a maximum bonus us £3,000 if you save the maximum allowed of £12,000. Before you get either you should consider which is better. Lifetime ISA vs Help to buy ISA.
• Help to buy equity loan- gives you up to 40% as a 5-year interest-free equity loan. You begin to pay interest at 1.75 % after the fifth year and 1% plus RPI for every year thereafter.
• Shared ownership- You can buy between 25% to 75% of the property initially with a shared ownership mortgage and then buy more using a staircasing mortgage.
• Armed forces help to buy- similar to the help to buy equity loan but specific for the armed forces personnel giving them an increased chance of acceptance.
• Rent to buy- This is the right to buy scheme on which this guide is currently discussing. A different marketing name is just used. Watch out for this when shopping to avoid missing out on eligible properties due to confusion.
• Right to buy- allows you to buy your home at a discount price.
• Preserved right to buy- same as above.
• Right to acquire- same as above.

You may also be able to use a host of mortgages with the help of your family.

They are a certain type of mortgage known as a family springboard mortgage, they include mortgages from lenders such as the Barclays family springboard mortgage, the lloyds lend a hand mortgage or the post office family link mortgage.

If you need financial advice and you live in the UK then you could contact the Money Advice service over the phone or via chat for impartial advice.

You can also contact the debt charity “Step Change” if you are in debt and need help.