Can I get a mortgage while working a temporary job?

iupericaJanuary 28, 2012

I've been saving to buy my first home for the past couple of years. I have enough money to put 20% down and my credit is very good (I've never carried a balance or paid late on anything...I'm also 25, so it's not like I have the same history as someone older, but at least it's good).

My only concern for applying for a mortgage is my job - it's classified as "full-time temporary". My current contract lasts through August but I'm getting the feeling from my employer that, instead of being brought on full-time when the contract is up, that it will be extended at least another year.

Will it be possible to get a mortgage while working a contracted, temporary job? If a bank takes a chance on me, will I have to pay a ridiculous interest rate?

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You will need more money down and a longer work history. 40% down cures a lot of a bank's hesitancy, as would 5 years of "temporary" employment.

    Bookmark   January 29, 2012 at 12:24AM
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"I've never carried a balance or paid late on anything"

Check your credit score.

If you had never had longer term monthly payments on a loan it may not be as "very good" as you think.

The ability to meet long term contracts s part of the issue.
The ability to manage short term moth to month is a part of it, but not all of the issue.

Only having a "temporary job" is going to cause a lot of problems, unless you are working for a temp agency and have MANY years of experience ad income to display.

Bouncing from job to job is NOT a good sign of reliability.

Would YOU want to lend money for 15 or 30 years based on what YOU know of your employment history?

Having more down does remove many concerns of lenders.
They figure if you have more 'skin in the game' you will be less likely to default and lose you money.

They will poke very hard at the source of the funds though.
They want to make sure that they are not borrowed, and that even after settlement you have sufficient financial reserves to carry the property.

Remember tat this is NOT your last house.
The odds are tat there qwll be others down the road, so do not overspend at this point.

With a large down payments the lender may not look as hard.this also means YOU have to look hard at what you can really afford month to month, and NOT just what they are wiling to lend you.

Banks like 'safe' deals, and if you have a lot of money down will often be wiling to lend you the money to hang yourself financially.
They know that if they take the property, they will not risk losing money.

    Bookmark   January 29, 2012 at 10:29AM
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I know the responses above , while truthful, may be a bit disheartening so I want to say something positive. First, way to go on saving 20% by age 25! Second, many temporary jobs can be quite good and at a nice pay scale. They aren't just 'fill-in' positions, but instead are special project based and sometimes those projects can lead to permanent employment or the company decides that you are just too valuable to loose and moves you into a slightly different permanent position. What I'm trying to say is that if you like your position and company now, don't change jobs into something less fulfilling just because it is "permanent." No job is truly permanent anyway. Of course if something perfect comes up, go for it. If buying a house doesn't pan out now, don't get discouraged. Be proud of yourself for saving, keep it up, focus on your career and before you know it you'll be a proud homeowner! It's hard to be patient at 25 - it's hard at any age - but patience pays off especially when you are working towards a goal. Good luck and keep up the good work!

    Bookmark   January 29, 2012 at 1:41PM
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I'm not sure the bank would know whether your job is temporary or permanent (though truthfully, every job is temporary). You need to list your employer and how long you've worked there, but I don't recall ever seeing a blank that says "how long will this job last?"

If you do get turned down in one place, keep shopping banks.

    Bookmark   January 30, 2012 at 7:34AM
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"I'm not sure the bank would know whether your job is temporary or permanent "

When they verify the employment they will be told.

    Bookmark   January 30, 2012 at 10:02AM
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It really depends on the contract situation though. For instance, most new teachers in this area are on 1 year contracts. They technically don't have a job next year. They don't have trouble getting loans though because everyone know that they will still have school next year and they probably will need some teachers.

If it is a big enough company, it might be worth it to ask some questions in HR. If they relocate a lot of contractors, they might have some experience as to which lenders have the most helpful policies in your area.

    Bookmark   January 30, 2012 at 11:20AM
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How long at the job? What is your job history for the past 2 yrs? And is it the same industry?

Most lenders will call your employer and verify your work employment, etc. so if the information aligns with what you put on an application which they approved you for = GREAT!
If you can verify your income and source of funds for the past 2 yrs that is all the lender needs and doesn't matter your employment after August as long as you are employed today (or duration of mortgage) and income shows the same pattern.
There are exceptions like you work for census or campaign/politician so you are unemployed after Nov or primary.

    Bookmark   January 30, 2012 at 2:22PM
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"For instance, most new teachers in this area are on 1 year contracts."

That is pretty far from 'temporary employment.'

They are contract employees, not 'at will' employees.

And I have never seen an interval as short as two years.

Maybe for someone just starting out.

If you do not have a solid work history you can expect for things like tax returns to be requested, just as if you are self employed.

    Bookmark   January 30, 2012 at 3:51PM
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Hi everyone! Thank you all so much for the information - it helps me to make sure all my bases are covered before I start looking, go to get pre-approved for a mortgage, etc.

My past work history is as follows:
Graduated college in May 2009
June 2009 - began working in my field through a temp agency
September - 2009 convinced my employer to buy out my temp agency contract and became full-time
June 2011 - left my former job to begin this "full-time temporary" job, a contracted position

So this June I will have had 3 solid years of employment in my chosen field, with the pay stubs and tax returns to back it up (well, tax returns for two years, but you understand...)

My original contract was to run out in March; it was just extended to August 31, 2012. At that point, it may be extended for another year (likely), I will be offered a permanent position (somewhat less likely, but not out of the question), or I will be let go (from what my boss is saying, far less likely, but I do know that unexpected things can happen).

Finding a lender who works with these situations is a great idea - I do work for a large, national company but their presence in my community is small. However, there are a lot of freelancers and other similar job situations in the county, so they must be working with banks somehow.

Again, thank you for the input - keep it coming with whatever else I may need to consider, it's very much appreciated.

    Bookmark   January 30, 2012 at 4:11PM
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"That is pretty far from 'temporary employment.'

They are contract employees, not 'at will' employees. "

Our teachers aren't even legally allowed to unionize. Unlike most states, teaching jobs are not particularly secure here - and that doesn't even get into teachers assistant etc. Most teachers are on 1 year contracts and administrators and assistants are only contracted for the school year not even a full calendar year. It is pretty amazing how different teaching is in a non-unionized state. Lots of teachers really don't have their contracts renewed.

    Bookmark   January 31, 2012 at 8:29AM
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"Finding a lender who works with these situations is a great idea"

Find a mortgage broker.

A single bank or lender only has their loan offerings available.

A mortgage broker can look over many lenders offerings and find one to fit your situation.

It may be as simple as grouping your loan in with some others that might look better to the lender, and offering all the loans as a 'package deal.'

    Bookmark   January 31, 2012 at 9:38AM
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You never know unless you try. Good luck!

    Bookmark   February 7, 2012 at 3:45PM
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