At a time when employers are reluctant to accept employees on an employment contract, mandate or specific work contracts are more popular. However, what are the chances that with such a contract we will be able to get a mortgage? Let’s look at the relationship between a mortgage and a mandate contract or a specific task contract.
Type of contract and creditworthiness
Everyone would like to be able to take advantage of credit products offered by banks, in particular when it comes to high amounts for an apartment. Much depends on your earnings and creditworthiness, but what effect does this have on the type of contract you have signed with your employer? If banks were to allocate loans only to people with an employment contract, their profits would probably be much smaller.
This is related to the current situation on the labor market, where such contracts are reluctant to be signed. Employers are looking for savings and signing contracts with employees “Junk” can provide them, at least until regulatory provisions come into force.
Therefore, the banks adapted their loan offers to current realities, but in the case of contracts other than employment contracts, the conditions for obtaining a loan are more stringent. The most important are two issues: the length of the contract and the amount of income.
The duration of the contract
In the case of a custom contract, it is not necessary to specify the duration of the contract. More important is because the borrower has already been working for the company. There are banks that will grant a loan to a person with a six-month term of office, but usually those working for 1-2 years are considered.
In the case of an employment contract, what counts is how long the contract has been signed, but such contracts are usually signed for several years or for an indefinite period. This is different for custom contracts.
They can be signed for a short period, e.g. several months, but if they have been regularly extended for a year or two (subsequent contracts have been signed), this indicates a certain stability of the borrower’s position in the company and the associated risk decreases.
The amount of income
In employment contracts, the entire amount of income entered in the document is taken into account. In the case of a mandate or a work contract, banks may only consider part of their earnings. In some cases, the calculation of creditworthiness is based on only half the income, so that not everyone can get a positive response to a credit inquiry.
Fortunately, there are also banks that decide to calculate the borrower’s ability based on the amounts that affect his bank account or on the basis of the client’s statement on tax costs and actual costs. Flat-rate costs are used for contracts for specific work.