Can I get a mort­gage if I am on a tem­po­rary con­tract?

CityPress - - Business -

Rachel writes:

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.

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