It’s not uncommon for agency workers to face more hurdles when it comes to getting on the property ladder. When deciding if a mortgage is affordable, the lender will want to know about your employment history.
Most people are employed full time in the same role. Their monthly salary never changes and this makes it easier for lenders to decide if the loan is affordable. However, agency workers know that this is rarely the case for them. Their income might change one month to the next. They might get a day rate one month and a fixed fee the next.
While this might complicate the application process, it isn’t a reason to give up on your dreams of owning your own home. While some mortgage providers might not offer mortgages to agency workers, there are plenty of providers out there who will be more than willing to work with you.
Why is it difficult for agency workers to get a mortgage?
There are a few different reasons why agency workers might struggle. The first is outlined above. When there are fluctuations in your monthly income, this can make it difficult to determine affordability.
The second is that some agency workers will be considered self-employed. If you are responsible for your own taxes, then mortgage providers might ask to see your last three years of accounts. If you haven’t been an agency worker for three years, then you might struggle to provide this.
And finally, agency workers might be on temporary contracts which can make lenders nervous. Your contract might renew periodically, but without the reassurance of a full time permanent contract, it can make lenders wonder what you would do if your contract came to an end and you couldn’t find another job.
So, how do I get a mortgage as an agency worker?
While it might be true that some lenders are reluctant to work with agency workers, this isn’t the case for all of them. Sometimes, all it takes it approaching the right lender.
If you aren’t sure where to focus your efforts, working with a mortgage broker such as Niche Mortgage Info can help. They will be able to point you in the right direction and ensure you don’t waste any time dealing with lenders who aren’t familiar with agency workers.
How can I increase my chances?
Before you start looking for a new home, get your budget in order. There’s no point in applying for an application for a home that is way outside your budget. Your mortgage should take up no more than 35% of your total monthly income. Once you know how much you can afford to pay every month, you can think about how much you can afford to borrow.
Next, you’ll want to get a healthy deposit lined up. If you don’t have rich relatives or lottery winnings laying around, then you’re going to have to start saving. If this is your first home, make sure that you make the most of any first time buyer schemes available to you.
And finally, you need to get your credit score in order. Sign up to all of the free credit checking agencies and find out where you stand. Once you know where you credit score is, you can fix any mistakes, get things back on track and work towards getting the best possible score you can.
Do I have to use a specialist lender?
It all depends on your personal circumstances and the state of the mortgage market when you are applying. Lenders will look at so many different factors, including the type of work that you do. Medical professionals, for example, might not have a hard time securing a mortgage as an agency worker as it is assumed that the medical profession is more stable. However, an agency warehouse worker might not have the same experience.
If you are determined to get on the property ladder, there’s no reason your agency worker status should hold you back. In many cases, you just need the advice of the right mortgage broker with access to all lenders, rather than a select few. Be wary of any mortgage broker who only works with a small range of lenders as they will likely be collecting a healthy commission for any referrals.