Trading Up Mortgage while husband is on contract work

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kerbs

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Hi there,
Due to our growing family we are looking at trading up. This is not an immediate requirement but would prefer to move before our eldest starts school in September 2012.
The issue is that whilst I am still working on quite a good salary (90k) my hubbie lost his job in January 2010. He has been a stahd up till now and is going to start looking for work in the next couple of months- he works in IT which is picking up so think he has quite good prospects.
My question is - when it comes to getting a mortgage how much will this be held against us- I know things are stricter at the moment.. will he need to be in a company at least 2 years before they will count his wages? Also there is contract work out there at the moment which could be more lucrative to a permanent position. Should we discount this though on the basis the banks may not like it? We were previously approved for 670k mortgage to buy an 800 k house. We also have 80 k redundancy money which was not included in the mix but which we have not touched.
All replies appreciated as this is beginning to stress me out a little - I def want to be in new area before school starts.
Thanks.
 
kerbs said:
He has been a stahd up till now and is going to start looking for work in the next couple of months- .
Click to expand...

I don't understand this? What does it mean? I presume it's a typo.

I have done a Key Post "Selling your house and buying another" which you should read.

The mortgage market is tight at the moment but it may be a lot freer when you go to trade up. I don't think you should be getting stressed now.

Have you equity in your current home? Have you made all your repayments without rescheduling?

Ideally the lender would want to see someone in a permanent job. But it probably depends on how much you are borrowing. A €670k mortgage for an €800k house looks huge. How long ago was that?

The decision on whether to work contract or permanent is difficult. Given that you are well off financially, I think your husband should probably take the job which he likes best and which has the best prospects. If this happens to be the highest paying, you will have up to 24 months to put some more savings together and then you won't have to borrow so much.

It is taking a long time to sell houses, so you should consider putting your current house on the market now as it's nice not to be under any pressure when you are selling.

Brendan
 
Appreciate that.. yes stahd - possibly similar to comedian but no drunkness that I am aware off..
We dont have any equity in our current home - we would be selling at a losss.. we have 2 other houses which we would need to sell both have equity in them (small mortgages + bought in 2000) and we would be using that.. We have had no issue paying all mortgages in full t.g. so dont think that would be the problem. What I am concerned with is going to the bank and then being told - actually we wont approve you for a mortgage unless both of you are in permanent jobs for at least 2 years/ 3 years or some random time line which we wont be able to meet.. Does anyone have any experience of this?? Thanks!
 
If he is on contract then you will struggle to get approval.
If he is full time then most lenders will require him to be there for a year not on probation.

The above relates to current lending policy, who knows what it will be in two years though.
 
Hi, I am a IT contractor and my girlfriend is a full time Nurse. We are currently looking to get our first home. I also had a worry about been a contractor but after talking to the banks and mortgage brokers they have no issues at all. They actually offered us a lot more then what we had imagined (500K) although those repayments are a bit much for us. We also have no other depts between us which probably helped.
The broker told me the we were fine it would only be an issue if I was self employed in the building sector.
 
Hi Emmet,

Are you a self employed IT contractor or are you an employee of a company or a contract?
 
Norfbank,

I am self employed and am a director of a limited company and I am signed up with an agency who get me the work. I probably should have mentioned that, cause most people get confused when you say you are a contrator in IT.
Also when I was talking to the banks they are looking for 6 months of paper work.
 
kerbs said:
Appreciate that.. yes stahd - possibly similar to comedian but no drunkness that I am aware off..
We dont have any equity in our current home - we would be selling at a losss.. we have 2 other houses which we would need to sell both have equity in them (small mortgages + bought in 2000) and we would be using that.. We have had no issue paying all mortgages in full t.g. so dont think that would be the problem. What I am concerned with is going to the bank and then being told - actually we wont approve you for a mortgage unless both of you are in permanent jobs for at least 2 years/ 3 years or some random time line which we wont be able to meet.. Does anyone have any experience of this?? Thanks!
Click to expand...
Hi kerbs,
While the bank won't accept contract employment and like to see someone in permanent position for x length of time I don't think that in your case it might be a big issue, since your own salary is for 90k so in your own right you could qualify for the mortgage. In that case hubbie's length of service or employment type might not matter. I doubt though that a 670k mortgage would be given just on your salary. To be honest it's a huge mortgage and a very expensive house.
 
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hi fizzelina,
yes we need two incomes to get that mortgage.
emmetd9 thats good news around the contracting + 6 months of paperwork.
Do you mind me asking which bank you were talking to?
Thanks!
 
It was Aib but the broker went to a number of different ones for us. I went to aib directly.
 
Hi kerbs

Do I understand you correctly that you have three houses at present.

You should sell all three before committing to buying another one. It seems that you will be just increasing your overexposure to property otherwise.

Brendan
 
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