Mortgages and 12 Month Fixed Term Contracts: What You Need to Know

When it comes to applying for a mortgage, having a stable source of income is crucial. But what if you’re on a 12 month fixed term contract? Can you still get a mortgage? In this blog post, we’ll explore the ins and outs of getting a mortgage on a 12 month fixed term contract and provide you with the information you need to navigate the process.

The Challenge of Getting a Mortgage on a 12 Month Fixed Term Contract

Securing a mortgage when you’re on a 12 month fixed term contract can be challenging. Lenders typically prefer borrowers who have a steady, long-term source of income, such as those on permanent contracts. However, doesn’t mean impossible get mortgage on fixed term contract. With approach and lender, can done.

Factors that Influence Mortgage Approval

When for mortgage on 12 month fixed term contract, several factors influence lender’s decision. Factors include:

Factor	Impact
Income Stability	Lenders will assess the stability of your income over the 12 month period and may request additional documentation to support your application.
Credit History	Your credit history plays a crucial role in mortgage approval. A good credit score can strengthen your application.
Deposit Size	A larger deposit can offset the risk for the lender and improve your chances of approval.
Employment History	A strong employment history can demonstrate your ability to secure future employment after the fixed term contract ends.

Case Studies

Let’s take look couple case studies illustrate individuals on 12 month fixed term contracts have successfully obtained mortgages:

Case Study 1: Sarah

Sarah works in the IT industry on a 12 month fixed term contract. She stable work history good credit score. Sarah was able to secure a mortgage with a larger than average deposit, which offset the risk for the lender.

Case Study 2: Michael

Michael is a freelance graphic designer on a 12 month fixed term contract. Although his income was variable, he was able to provide evidence of consistent work and a promising pipeline of future projects. Michael also had a substantial savings history, which helped strengthen his application.

While getting a mortgage on a 12 month fixed term contract may pose challenges, it is by no means impossible. By demonstrating income stability, maintaining a good credit history, and providing a larger deposit, individuals on fixed term contracts can improve their chances of mortgage approval. It’s important approach process clear understanding factors influence lender decisions seek out lenders who open considering applications from individuals on fixed term contracts.

 

Top 10 Legal Questions About Getting a Mortgage on a 12 Month Fixed Term Contract

Question	Answer
1. Can I get a mortgage on a 12 month fixed term contract?	Absolutely! Lenders often consider fixed term contracts as stable income, especially if you have a history of consistent employment. Make sure to provide evidence of your income and job stability to strengthen your mortgage application.
2. Will my fixed term contract affect my mortgage approval?	While some lenders may be cautious about fixed term contracts, many others understand that they are increasingly common in today`s job market. It`s essential to work with a lender who is familiar with and open to considering your specific employment situation.
3. How can I improve my chances of getting a mortgage on a fixed term contract?	Focus on maintaining a strong credit score, saving for a sizable down payment, and providing solid documentation of your income and employment history. It`s also beneficial to seek pre-approval from lenders to understand your borrowing options.
4. Are there specific lenders that specialize in mortgages for fixed term contracts?	Yes, some lenders have programs designed specifically for individuals on fixed term contracts. Working with these lenders can increase your chances of securing a mortgage that suits your employment situation.
5. What should I do if a lender rejects my mortgage application due to my fixed term contract?	If you encounter a rejection, don`t lose hope. Consider seeking advice from a mortgage broker, who can connect you with lenders specializing in working with individuals on fixed term contracts. You may also opt to build a stronger financial profile and reapply in the future.
6. Can my employer`s reputation impact my mortgage approval on a fixed term contract?	Yes, lenders often consider the stability and reliability of your employer when assessing the strength of your employment situation. If your employer is reputable and financially stable, it can positively impact your mortgage application.
7. What if my fixed term contract is due to end before my mortgage term?	Discuss this with potential lenders. Some may be willing to consider your future employment prospects, while others may require you to secure a new contract or employment before approving your mortgage application. It`s crucial to be transparent about your employment timeline.
8. Can I refinance my mortgage if I switch to a permanent contract?	Absolutely! Once you transition to a permanent contract, you can explore refinancing options to potentially secure better terms and interest rates. Consult with mortgage professionals to understand the best approach for your situation.
9. Will lenders consider bonuses and commissions from my fixed term contract?	Yes, bonuses and commissions can be factored into your overall income when applying for a mortgage. It`s crucial to provide accurate and detailed documentation of these additional earnings to strengthen your application.
10. Are there alternative financing options for individuals on fixed term contracts?	Absolutely! In addition to traditional mortgages, you may explore specialized loan programs, such as government-backed loans or adjustable rate mortgages, to accommodate your fixed term contract. Working with a knowledgeable mortgage advisor can help you explore these alternatives.

 

Legal Contract for Mortgage on a 12 Month Fixed Term Contract

It is important to understand the legal implications of obtaining a mortgage on a 12 month fixed term contract. This contract outlines the terms and conditions that govern the process and the rights and responsibilities of both parties involved.

Contract Date:	[Insert Date]
Parties:	[Insert Names of Parties]
Property Address:	[Insert Address of Property]

WHEREAS the Borrower is desirous of obtaining a mortgage on a 12 month fixed term contract for the purpose of purchasing the aforementioned property;

WHEREAS the Lender is willing to provide the mortgage under the terms and conditions set forth in this contract;

NOW, THEREFORE, in consideration of the mutual promises and covenants contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

1. Definitions
2. Terms Conditions
3. Representations Warranties
4. Indemnification
5. Default Remedies
6. Dispute Resolution
7. General Provisions

IN WITNESS WHEREOF, the parties hereto have executed this contract as of the date first above written.