Mortgage without a fixed contract? It can be done!
You quite like the idea of owning your own home. Your current rented property may still be alright, but there’s that nagging feeling you’re throwing money away – which is why you have been considering going house-hunting. There’s just one problem: you don’t have a fixed employment contract. Well, don’t delete that Funda app right away! A mortgage without a fixed employment contract is often still possible, with an additional statement from your employer or employment agency.
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What is your situation?
- Are you currently employed, but on a temporary contract? In that case, you can apply for a letter of intent from your employer.
- Are you self-employed? Then there are other possibilities, which you can discuss directly with our advisors.
- Are you working on your PhD? Read here about how Viisi can help you.
- Are you on a flex contract via an employment agency? Then you can opt for a statement of employment prospects.
Statement of intent
Although you are currently employed, you are on a temporary contract. In that case, you’ll need a letter of intent from your employer. This is not the same thing as an employer’s statement, but it does constitute part of it.
In a letter of intent, your employer will state whether they intend to employ you permanently after your current contract expires, on the condition that your performance remains at the same level, and the business conditions remain the same. It is generally not a problem to obtain a letter of intent from your employer. After all, it is not a hard and fast guarantee that you will actually be given a permanent contract in due course.
Based on the employer’s statement, plus the letter of intent, the lender can determine whether you will be able to meet your mortgage repayments in the future. These documents together effectively serve as a permanent contract.
Are you still on a trial period?
To the lender, this means you do not have a valid income. In this case, you can only apply for a mortgage if your income is not required (e.g. because your partner has sufficient income) or if your trial period is about to end.
In the latter case, the contract that starts after your probationary period will be considered. Is it a permanent contract, or a temporary contract with a statement of intent? Subsequently, the income stated on the contract will be taken into account.
Have you not been offered a permanent or temporary contract after your trial period? If so, your maximum mortgage will be calculated based on your income over the past 3 years. The way your income is determined, in this case, is similar to that of a person who is self-employed.
Statement of employment prospects
Are you on a flexible contract via a temporary employment agency? If so, you cannot obtain a letter of intent. But in some cases, you can get a statement of employment prospects.
A statement of employment prospects is an official document that serves as a type of proof of your (employment) background. In addition to your current position, it also includes your education, work experience, and prospects in the labour market. In it, the temporary employment agency states for example that, on the basis of your work and the developments in the labour market, you will at least maintain your current level of income.
Based on this information and an employer’s statement from your temporary employment agency, the lender will assess whether your income will remain stable in the future, or perhaps even increase. A statement of employment prospects consequently provides (as does a letter of intent) a somewhat broader picture than just your current type of contract.
Conditions of the statement of employment prospects
However, a statement of employment prospects is subject to a number of conditions: first of all, check whether your temporary employment agency is affiliated with the Stichting Perspectiefverklaring (in Dutch, Statement of Employment Prospects Foundation), as this is not always the case. In addition, you must comply with the following points:
- You have completed at least 1 year of assessed work at the employment agency;
- You are seriously looking to buy a property;
- You can provide 2 references;
- You are willing to take a personality test.
Can you fulfil these conditions? If so, you can request a statement of employment prospects from your temporary employment agency. More information can be found on the website of Stichting Perspectiefverklaring. The statement is valid for 6 months from the date of issue, so keep that in mind when house-hunting!
No permanent contract and no letter of intent, or statement of employment prospects?
Sometimes your employer or employment agency cannot issue a letter of intent or a statement of employment prospects. Even if that is the case, you still have options.
In order to issue a mortgage without a fixed contract and without a statement of employment prospects, the bank will look at the remaining period of your current employment, and at what you have earned during the past 3 calendar years. The way your income is determined, in this case, is again similar to that of a person who is self-employed.
Our advisers can help you move forward
A mortgage without a fixed contract is possible, although it takes a little more effort to set up. The best way to go about this depends very much on your situation. That’s why it’s useful to obtain some sound advice from one of our mortgage advisers, who will be happy to discuss your options, and calculate how much you can borrow.