Can I get a mortgage if I am on a temporary contract?
I am earning R21 000 a month as a teacher and I would like to buy a house. Do I qualify to buy a house even if I am a temporary departmental teacher? I will be appointed permanently soon. And if I do qualify, how much would I be able to spend on a property?
Albertus van Staden, head of credit, FNB housing finance, replies:
We assess the likelihood of the temporary worker to remain employed in the near to midterm because buying a house is a longterm commitment.
Being temporary, we assess the history of the applicant. For example, was she only recently employed on contract or has she been employed on contract for some time?
We also look at the likelihood of being employed in the industry and whether the temporary employment status could turn into a permanent position.
In this instance, teachers are easily re-employable and are generally in demand, so an application would be considered favourably.
City Press replies:
The amount you would qualify for would depend on your current monthly expenses. Assuming that R21 000 is your net salary and you do not have any major expenses such as car finance, you may be able to afford a repayment of about R6 300 a month, which would equate to a property that costs about R650 000.
Keep in mind that there are a lot of other expenses involved when buying a home, such as bond registration fees as well as municipal deposits.
Banks also usually want a 10% deposit, so you would need to have about R60 000 in savings already.