Can You Get A Mortgage On A Zero-Hours Contract?

Can you get a mortgage on a zero-hours contract?

Zero hour contracts are becoming more and more common in the UK, with around 920,000 people employed on this basis in 2021.

The COVID-19 pandemic has also seen an increase in the use of zero-hour contracts, with many employers using them to cover for staff absences or fluctuations in demand.

So, can you get mortgage approval if you are employed on a zero-hours contract? The short answer is, yes, it is possible to get a mortgage on a zero-hours contract. However, there are a few things to bear in mind.

What is a zero-hours contract?

A zero-hour contract is an agreement between an employer and employee, where the employer does not guarantee any set hours of work, and the employee is only paid for the hours they actually work.

Zero-hour contracts are becoming increasingly popular in the UK. They offer workers more flexibility and freedom and allow employers to hire staff on an as-needed basis.

However, zero-hour contracts can also be risky for workers – they may not know how many hours they will work each week, which can make budgeting difficult.

If you are thinking of taking a job that is offered on a zero-hours contract and also applying for a mortgage, it is important to speak to a mortgage advisor first. They will be able to assess your financial situation and advise you on the best way to go about getting a mortgage.

Remember, each case is different – so what works for one person may not work for another.

Is it more difficult to get a zero-hour contract mortgage?

When it comes to zero-hour contract mortgages, it can be more difficult to be accepted for a mortgage as most lenders will consider you to be employed on an insecure basis. This is because most lenders like to see evidence of regular income and job security when considering mortgage applications.

However, this doesn't mean that it's impossible to find a mortgage if you're on a zero-hours contract - there are some specialist lenders who may be willing to consider your application.

It's always important to speak to a mortgage advisor to discuss your options and find out which lenders will be a good fit for you.

Tips for getting a zero-hours contract mortgage

1. Get Professional Advice - If you are on a zero-hours contract, the first thing you need to do is speak to a mortgage advisor. They will be able to assess your financial situation and advise you on the best way to go about getting a mortgage. It is important to remember that each case is different, so what works for one person may not work for another.
2. Gather Evidence - Once you have spoken to a mortgage advisor, you will need to start gathering the necessary documentation. This includes things like your last three months of bank statements, payslips, and proof of address. You will also need to provide details of your employment situation, including how long you have been in your current job and what your hours of work are.
3. Save More Towards a Deposit - One of the best things you can do if you're on a zero-hours contract is to start saving more toward a deposit. The larger your deposit, the more likely you are to be accepted for a mortgage. This is because lenders see it as less of a risk if you have more equity in your property.
4. Be Prepared for Higher Interest Rates - If you are accepted for a zero-hour contract mortgage, you may find that the interest rates are higher than average. This is because lenders see you as a higher risk borrower. However, if you have a good credit rating and can prove that you're able to make your repayments, you may be able to negotiate a better deal.
5. Improve your Credit Score - Another important tip for getting a zero-hours contract mortgage is to make sure your credit score is as high as possible. This will give you a better chance of being accepted for a mortgage and also get you a better interest rate. You can improve your credit score by making all your payments on time and keeping your balances low.

Getting a mortgage on a zero-hours contract is possible, but it can be tricky. However, if you follow the tips in this blog post, you should be able to get the mortgage you need. Good luck!

How much can you borrow on a zero-hour contract?

This will depend on a number of factors, including your income, employment history, and credit score, but zero-hour contract mortgages are available up to a maximum of 95% in the right situation.

This means that if you are looking to buy a property worth £200,000, you would need to provide a deposit of at least £10,000.

A mortgage advisor will be able to assess your situation and give you an idea of how much you could borrow. Remember that each application is assessed on a case-by-case basis, so the amount you can borrow may vary from lender to lender.

Can you remortgage on a zero-hours contract?

Again, this will depend on your individual circumstances. However, if you have built up some equity in your property, you are more likely to be viewed as a lower risk by lenders.

If you are thinking of remortgaging your property, it is important to speak to a mortgage advisor who will be able to assess your situation and give you tailored advice.

Can you get a zero-hour contract mortgage with bad credit?

Yes, it is possible to find a mortgage with bad credit on a zero-hour contract. However, the interest rate and terms of the loan offered by mortgage lenders are likely to be less favourable than if you had a good credit score.

If you have bad credit, it is important to speak to a mortgage advisor before applying for a mortgage. They will be able to advise you on the best mortgage deals for your circumstances. Lenders will be concerned with the age and severity of the credit issue, and not all lenders will be willing to offer a mortgage to someone with bad credit.

Zero hour contract workers with bad credit may be able to get approved for a mortgage, but the terms and conditions are likely to be less favourable. It is important to speak to a mortgage advisor before applying for a mortgage so that you are aware of all the options available to you.

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What is the minimum salary to get a mortgage?

This will also depend on a number of factors, including the amount you want to borrow and your credit score. Generally, the minimum salary required by most lenders is around £20,000. However, this may vary depending on the lender and the type of mortgage you are applying for.

If you are in a zero-hours role, it is important to speak to a mortgage broker before you start the application process. They will be able to assess your situation and advise you on the best course of action when it comes to mortgage lenders. An experienced mortgage adviser will also be able to help with your mortgage application, boosting your chances of approval.

It is also worth noting that most mortgage lenders will require you to have been in your current job for at least three months before they will consider your application. This is because they want to see that you have a stable income.

So, if you are on a zero-hours contract and you are looking to buy a property, it is important to speak to a mortgage advisor as soon as possible. They will be able to advise you on the best course of action and help you find the right lender for you.

How to get a mortgage on a zero-hours contract

The first step is to speak with a mortgage broker who can assess your financial situation and offer guidance on the best way to get a mortgage. It’s important to remember that each case is different, so what works for one person may not work for another.

Get started with Teito

We compare thousands of mortgages from 90+ Lenders, so you can be sure to get the best deal for you. We work with people on Zero-Hours Contracts every day, so we know what to do to make it happen.

Get started today and we'll be with you every step of the way. Request a call back from one of our expert mortgage advisors or start your application online now.

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