Here is a list of different types of employment and how they can affect the mortgage application process:

Employed PAYE

This is the most favourable type of employment for a lender when it comes to applying for a mortgage as it is generally easy to understand and verify. Lenders will view you as being in stable, secure work and therefore less of a financial risk. It should be relatively easy for you to obtain a mortgage if you are in PAYE employment.

Self-Employed

Self-employed people can often find it more difficult to secure a mortgage than those who are in PAYE employment. This is because your income is often less predictable. Where you have been self employed for a number of years and have good accounts then this does simplify the process. However, there are now many specialist lenders for the self-employed who don’t have the ‘normal’ three years of accounts.

Read more about mortgages for the self-employed.

Subcontractors

Subcontractors are assessed as self employed individuals for income tax purposes. However, construction workers registered with the Construction Industry Scheme (CIS) should be apply to apply for a CIS mortgage and have their income assessed as an employee by using the CIS vouchers as ‘payslips’.

Company directors

If you are a shareholding company director, you will often have several different sources of income. This can include your salary, dividends and bonuses. Some lenders will take all of these into account when assessing your affordability and a number will also acknowledge your share of any retained profits. They will also look at your company’s accounts to get an idea of its financial stability.

Read more about mortgages for company directors.

Gig workers

The ‘gig economy’ is becoming increasingly popular, with people working for companies such as Deliveroo or Uber. This type of employment can make it more difficult to get a mortgage as your income is often less predictable. However, there are some lenders who will accept gig workers as long as they have been in the same line of work for a certain amount of time.

Zero Hour Contracts

These types of contracts are now commonplace, particularly with businesses in the hospitality and retail sectors. However, they can make it more difficult to obtain a mortgage. This is because your income is often unpredictable and you may not have a guaranteed number of hours each week. There are a number of specialist lenders who will accept these types of contracts, so it is worth shopping around.

Read more: Can you get a mortgage on a zero-hour contract?

Agency Workers

Agency workers are in a similar position to those on zero hour contracts when it comes to applying for a mortgage. Your income is often not guaranteed and this can make it harder to get a mortgage.

Fixed Term Contracts

If you are on a fixed term contract then this will not necessarily affect your ability to obtain a mortgage. However, it is worth bearing in mind that some lenders may require you to have at least six months left on your contract before they will consider you for a mortgage.

Read more about mortgages for contractors.

Retired

If you have retired but still have a good stable income then you should be able to obtain a mortgage without any problems. If you own a property, you may be able to remortgage to release equity. However, they will usually require that the mortgage is repaid within a certain time-frame, such as 10 years.

Read more about borrowing in retirement.