Can I get a mortgage on a zero-hour contract?

Over the past few years, there has been considerable discussion about the difficulties faced by individuals on a zero-hour contract, particularly when it comes to obtaining a mortgage or remortgage deal.

Most mortgage lenders require substantial evidence of a stable income source before considering a mortgage application. However, due to the unpredictable nature of zero-hours contracts, where workers are not guaranteed a minimum number of hours and are only paid for the hours they work, mortgage providers often view them less favourably. Even those who have been with the same employer for an extended period may encounter challenges in securing a mortgage.

While obtaining a zero-hours contract mortgage may be more challenging, it is not impossible. The key lies in finding a provider with more flexible lending criteria, and that’s where The Residential Mortgage Hub can assist.

How to get a mortgage when you’re on a zero-hour contract

Demonstrating to lenders that you are a low-risk borrower is crucial when applying for any mortgage. Lenders naturally want assurance that the mortgage will be repaid. Unfortunately, being on a zero-hour contract can put you at a disadvantage from the outset, as it is perceived as a high-risk employment structure.
So, how can you successfully secure a mortgage while on a zero-hour contract? Lenders will closely scrutinise the specifics of your contract. Despite the term “zero hours,” there are often additional details within the contract that lenders can utilize to evaluate your application. Lenders will also consider your employment history, the role you have and your occupation, and your earnings.

Your employment history plays a crucial role and is often the starting point for lenders when assessing your mortgage application. If you have a consistent work history within the same sector or have been employed by the same company for a significant period, it provides reassurance to lenders regarding the stability of your employment.

On the other hand, if there are significant gaps in your employment or if you have recently started a new job, it can raise concerns for lenders. Similarly, having a scattered employment record across different industries can also be a factor of consideration. Some lenders may require a minimum of 12 months’ employment with the same employer, while others may be more flexible and consider your application even if you have recently started a new job.

The nature of your occupation and the specific role you hold can significantly impact your mortgage application. This is particularly relevant if your role requires specific skills or qualifications, as these typically involve time and dedication to attain. Consequently, having a skilled occupation increases the likelihood of finding employment and assures lenders of your ability to repay the mortgage without difficulty.

Certain lenders may even offer preferential rates if you possess qualifications in a particular profession, regardless of your contractual status. Occupations such as teaching, accounting, engineering, and medical professions are among the fields where lenders may exhibit flexibility in approving mortgage applications. However, it is important to note that your occupation is not limited to specific professions. You can still demonstrate to lenders that you have accumulated significant experience in a particular field over the years, which can also positively impact your mortgage application.

Lenders also require assurance that you have the financial capacity to afford the mortgage you are applying for. Just because you are on a zero-hour contract doesn’t imply that you don’t earn a decent income. More importantly, demonstrating regular savings in your bank account each month can significantly enhance your application.

However, it’s important to note that simply providing your bank statements to a lender won’t guarantee approval. It is crucial to present your application in a comprehensive and strategic manner. This entails effectively showcasing your genuine financial potential. Our advisors can assist you in this process by professionally packaging your application to maximise its chance of approval.

Do I need a large deposit if I’m on a zero-hour contract?

While it is possible to obtain a mortgage with a 5% deposit, having a larger deposit can work to your advantage. A higher deposit amount often reduces the perceived risk for lenders. Since being on a zero-hour contract already categorises you as high-risk, a larger deposit can help reduce some of the risk associated with your application.

Certain lenders may have requirements for deposits ranging from 10% to 15%. However, it’s important not to be discouraged by this. It is still possible to qualify for competitive interest rates even with a smaller deposit. The specific lender you choose to apply with will determine the deposit requirements and the potential rates available to you.

To determine the precise deposit amount applicable to your situation, it is advisable to consult with our advisors. They will assess your circumstances in detail, enabling them to provide accurate guidance regarding the deposit you would need.

Specialist advisors for workers on zero-hour contracts

Two crucial factors for securing a mortgage on a zero-hours contract are knowledge and options. Our team reviews your specific situation, including your current zero-hours contract, work history, credit details, and other relevant factors. This comprehensive assessment allows us to search from 90+ UK lenders, providing us with a list of specialist lenders who are willing to consider your unique circumstances.

We approach the most suitable lender with your case, leveraging our experience working with numerous zero-hours workers in the past. This increases the likelihood of your offer being accepted, especially when our advisors handle the application process on your behalf.

We assemble a compelling application to present to the lender, providing documents and figures that demonstrate your creditworthiness. This can help persuade the underwriter that you are an ideal client to lend to, increasing the chances of approval for your zero-hours application. Once the lender approves the mortgage and agrees to lend to you, we work closely with all relevant parties to ensure a swift and efficient application process.

Contact our team today to explore the mortgage options available for individuals on zero-hours contracts. We are not only experts in zero-hours contract mortgages but also offer financial advice for buyers with adverse credit or a poor credit file, buy-to-let mortgage applicants, or anyone looking for lower interest rates and manageable monthly repayments. Whatever your needs may be, we collaborate with mortgage lenders to cater to every situation. Ready to discuss your options? Contact us on 01634 96811 or book your appointment online.