I’m on a zero hours contract, can I get a mortgage?

There has been a blanket-understanding in the last decade that having a zero-hours contract equals no mortgage ever being approved by any lender.

Especially in 2020, the rise in zero-hour contracts have only increased exponentially, with over a million now in zero-hour work according to the Office of National Statistics.

But as more lenders are moving with the times, some are even specialising in the field, including here at Rippled. If you are someone who has a zero-hour contract and are looking to apply for a mortgage, the following can help guide you into applying for one.

There are always two main attributes in obtaining a mortgage:

  • Proof of income
  • Affordability

Regardless of the type of work you are in, if these two points can be shown in detail and concisely prove that there is steady income being generated over the last twelve months at a minimum, a lender can see how eligible one can be on a zero hour contract.

But applying for a mortgage with a zero-hour contract employment history is high-risk regardless. It’s still totally dependent on the income generated in the last 12 months, at least.

A zero-hour mortgage is seen as a home loan. In the last few years, some lenders have adapted faster than others, requiring much less proof of income due to the unpredictability of what zero-hour work can bring.

There is also the likelihood that some lenders will require a bigger deposit than usual, in the 15% – 20% range. But that can still be reduced to 10% or 5% if other factors are also taken in. Great credit history, straightforward transactions and low debt can help the goal of having a mortgage when on a zero-hour contract as well.

However, the answer lies in the detail, and this is where loading up previous credit reports can help strengthen your case for a mortgage as well. These usually include: 

  • Name & Date of Birth
  • Address
  • How much you currently owe lenders
  • If you are on the electoral roll at your current address
  • Any late payments on existing or past credit cards or loans
  • Any missed payments
  • Any CCJ (County Court Judgements)
  • Moved away but still owe money
  • Entered a Individual Voluntary Agreement (IVA)
  • Declared Bankruptcies

Each of these can factor into whether you are eligible for a mortgage, especially when you’re on a zero-hour contract. These can be easily found through agencies such as Experian and Equifax, where your credit report and overall credit score can be viewed for yourself and the lender.

Once you have an idea of what you can afford toward a mortgage, the next step would be to talk to an adviser at Rippled. Your adviser will discuss your situation, help prepare the documentation and evidence to support your application, and see it through to completion.

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