Contract end date affecting mortgage Contract end date affecting mortgage
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  1. #1

    Nervous Newbie


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    Default Contract end date affecting mortgage

    I'm currently trying to get a mortgage.
    The agency I got my current contract through issues all their contracts with an 'ongoing' end date, to avoid having to extend them. My contract began in October and may run for 1 or 2 years, depending on programme delivery.
    My mortgage broker tells me that underwriters do not like contracts with an 'ongoing' end date, but was unable to tell me what contract length is preferred.
    My agency is willing to issue me a new contract with a specified end date, and extend as needed, but doesn't know what to make the contract length - 6 months, 1 year, or 2 years.

    Should I ask for an end date of 1 or 2 years - Oct 2020 or Oct 2021?

    Does anyone know what length of contract is preferred, or doesn't it matter as long as its over a minimum amount?

  2. #2

    Prof Cunning @ Oxford Uni

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    Quote Originally Posted by Domestos View Post
    I'm currently trying to get a mortgage.
    The agency I got my current contract through issues all their contracts with an 'ongoing' end date, to avoid having to extend them. My contract began in October and may run for 1 or 2 years, depending on programme delivery.
    My mortgage broker tells me that underwriters do not like contracts with an 'ongoing' end date, but was unable to tell me what contract length is preferred.
    My agency is willing to issue me a new contract with a specified end date, and extend as needed, but doesn't know what to make the contract length - 6 months, 1 year, or 2 years.

    Should I ask for an end date of 1 or 2 years - Oct 2020 or Oct 2021?

    Does anyone know what length of contract is preferred, or doesn't it matter as long as its over a minimum amount?
    To be honest, you've got other issues to worry about:
    1. IR35 - do you know if you're inside or out?
    2. Expenses - are you claiming any?

    If you have a contract with no end date, you are effectively a permanent employee. This will greatly affect how you are viewed by HMRC in terms of tax.

    Apart from that, I'd go for a 6 month contract, and make sure you have as big a deposit as possible
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  3. #3

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    Is the project something that is never ending? Or are you BAU resource that will be there until they carry you out in a box? The IR35 implications are a discussion for another day, I'm sure you've done your due diligence.

    Surely manglement have a clue as to when your job will be done?

    Failing that, 6 months is fine as WTFH said.

  4. #4

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    Quote Originally Posted by WTFH View Post
    Apart from that, I'd go for a 6 month contract, and make sure you have as big a deposit as possible
    No. Contract started in October, a six month end date would be April, not ideal for getting a mortgage. Go for one year, October 2020. If the lender is contractor friendly at all, that should be sufficient. If they aren't contractor friendly, you probably won't get the mortgage anyway.

  5. #5

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    Quote Originally Posted by WordIsBond View Post
    No. Contract started in October, a six month end date would be April, not ideal for getting a mortgage. Go for one year, October 2020. If the lender is contractor friendly at all, that should be sufficient. If they aren't contractor friendly, you probably won't get the mortgage anyway.
    I get your point but it's also perfectly normal to have rolling six month contracts

  6. #6

    Fingers like lightning


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    Quote Originally Posted by ladymuck View Post
    I get your point but it's also perfectly normal to have rolling six month contracts
    When in another thread that involved stress testing the CEST tool responses for all things Substitution, I also ticked Yes to the question about the current contract being a series of agreed contracts.

    CEST didn't like that, obviously. So then I ticked No to the current being a series of agreed contracts (which illustrates most cases anyway), and splendidly I fell on the side of the angels again.

    The definition of Rolling might need to be clarified for all things IR35, but I guess you get my point.

    Anyway, back to mortgages.

  7. #7

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    Thanks for all the advice.

    I'm in the public sector, working outside of IR35. IR35 contract assessment completed for every contract.

    The agency issues ongoing contracts for all its contract roles as standard, regardless of the client. It's not something I've seen before, but they're a well known agency in the public sector.

    Based on your feedback I'll ask the agency to issue me a contract that ends in October 2020.

  8. #8

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    Quote Originally Posted by Domestos View Post
    Thanks for all the advice.

    I'm in the public sector, working outside of IR35. IR35 contract assessment completed for every contract.

    The agency issues ongoing contracts for all its contract roles as standard, regardless of the client. It's not something I've seen before, but they're a well known agency in the public sector.

    Based on your feedback I'll ask the agency to issue me a contract that ends in October 2020.
    As long as you explain it's for mortgage reasons, they shouldn't panic and find a replacement.....
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  9. #9

    Contractor Among Contractors


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    Just been through this with 25% deposit. Had no contract - couldn't get a sniff, scored a 3 monther, how do you want the cash Sir.
    Jokes, but has done what I need it to.

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