Are you considering a temporary job but worried it might affect your mortgage application? If so, understanding the potential impact is vital before making any decisions. In today’s post, we discuss what you need to know about mortgages and temporary work contracts. We’ll cover the benefits of working in a contracted role for those looking for new employment opportunities as well as the possible drawbacks when applying for home loans or other types of financing. Read on to find out how this type of work can affect your ability to obtain financing and if there are any steps you should take if you decide to pursue a short-term job.
What is a contract job?
A contract job is a type of employment in which the employee and employer agree to certain conditions and terms in writing. This type of job can be either full-time or part-time, and it often comes with a set end date. Contract jobs are popular among both employees and employers because they offer a level of flexibility that is not found in other types of employment. For employees, a contract job can be a great way to get some work experience without making a long-term commitment. For employers, contract jobs can be a way to test out a potential employee before making a full-time offer.
The benefits of working in a contract role
Contract work has become an increasingly popular way to work in the modern economy. There are many benefits to working in a contract role, including flexibility, variety, and opportunity.
Flexibility is one of the biggest benefits of contract work. With no need for a long-term commitment, you can easily adapt your schedule to your needs. If you have a busy month, you can take on more hours; if you need some time off, you can easily take a break without any hassle.
Variety is another big benefit of contract work. When you’re working on a contract, you’ll likely be working on a variety of different projects with different teams. This means that you’ll never get bored and will always be learning new things. It also means that you’ll have a chance to work with different people and learn new skills.
The drawbacks of working in a contract role
Working in a contract role can have several drawbacks. The first is that you may not have the same benefits as other employees. For example, contract roles can be less secure. You may be at risk of being let go without warning, and you may not be given the same notice as other employees. This can make it difficult to plan for the future, since you never know when your contract will expire or if you’ll be offered another role.
This may make it harder for you finance-wise in regards to loans, mortgages, etc.
How contract work can affect your ability to obtain financing
When it comes to getting a loan, contract work can be a bit of a red flag to lenders. This is because contract work is often seen as a less stable form of employment, and lenders may worry that you won’t be able to make your monthly payments if you lose your contract work.
This doesn’t mean that you can’t get a loan if you’re working contract-to-hire, but it may mean that you’ll have to provide more evidence of your financial stability. This could include things like having a longer employment history, having a higher credit score, or demonstrating that you have other sources of income.
If you are working contract-to-hire, it’s important to be transparent with your lender about your situation. Let them know how long you expect to be working contract-to-hire, and be prepared to answer any questions they may have about your employment status.
Be sure to also keep up with your monthly payments, and make sure to notify your lender if your employment status changes in any way. By being upfront and proactive, you can help ensure that your loan application is successful.
How it may affect a mortgage
When applying for a mortgage, one of the key elements that mortgage lenders look at is the stability of income. Although having a contract job may be preferable to many employers, mortgage lenders typically prefer mortgage applicants with a more secure source of income and would generally consider mortgage applications from those with a good record of past performance in a contract position over those who have never held such positions. However, when considering mortgage applications from someone with a temporary job assignment, it’s important to remember that the lender or broker will take into account factors such as length of employment, years in the industry, sectors worked in and any other relevant details that can be gleaned from the applicant’s resume. For this reason, those seeking to purchase property with a mortgage should provide ample documentation and records relating to their temporary work contract when submitting their application.
In summary, a temporary job may be suitable for you and if so, that doesn’t mean you cannot get a mortgage. It may be more of a challenge but here at Airbourne Mortgages we can help you every step of the way and make this an easier process for you. Contact us today!