You will need more money down and a longer work history. 40% down cures a lot of a bank's hesitancy, as would 5 years of "temporary" employment.

"I've never carried a balance or paid late on anything"

Check your credit score.

If you had never had longer term monthly payments on a loan it may not be as "very good" as you think.

The ability to meet long term contracts s part of the issue.
The ability to manage short term moth to month is a part of it, but not all of the issue.

Only having a "temporary job" is going to cause a lot of problems, unless you are working for a temp agency and have MANY years of experience ad income to display.

Bouncing from job to job is NOT a good sign of reliability.

Would YOU want to lend money for 15 or 30 years based on what YOU know of your employment history?

Having more down does remove many concerns of lenders.
They figure if you have more 'skin in the game' you will be less likely to default and lose you money.

They will poke very hard at the source of the funds though.
They want to make sure that they are not borrowed, and that even after settlement you have sufficient financial reserves to carry the property.

Remember tat this is NOT your last house.
The odds are tat there qwll be others down the road, so do not overspend at this point.

With a large down payments the lender may not look as hard.this also means YOU have to look hard at what you can really afford month to month, and NOT just what they are wiling to lend you.

Banks like 'safe' deals, and if you have a lot of money down will often be wiling to lend you the money to hang yourself financially.
They know that if they take the property, they will not risk losing money.

I know the responses above , while truthful, may be a bit disheartening so I want to say something positive. First, way to go on saving 20% by age 25! Second, many temporary jobs can be quite good and at a nice pay scale. They aren't just 'fill-in' positions, but instead are special project based and sometimes those projects can lead to permanent employment or the company decides that you are just too valuable to loose and moves you into a slightly different permanent position. What I'm trying to say is that if you like your position and company now, don't change jobs into something less fulfilling just because it is "permanent." No job is truly permanent anyway. Of course if something perfect comes up, go for it. If buying a house doesn't pan out now, don't get discouraged. Be proud of yourself for saving, keep it up, focus on your career and before you know it you'll be a proud homeowner! It's hard to be patient at 25 - it's hard at any age - but patience pays off especially when you are working towards a goal. Good luck and keep up the good work!

I'm not sure the bank would know whether your job is temporary or permanent (though truthfully, every job is temporary). You need to list your employer and how long you've worked there, but I don't recall ever seeing a blank that says "how long will this job last?"

If you do get turned down in one place, keep shopping banks.

"I'm not sure the bank would know whether your job is temporary or permanent "

When they verify the employment they will be told.

It really depends on the contract situation though. For instance, most new teachers in this area are on 1 year contracts. They technically don't have a job next year. They don't have trouble getting loans though because everyone know that they will still have school next year and they probably will need some teachers.

If it is a big enough company, it might be worth it to ask some questions in HR. If they relocate a lot of contractors, they might have some experience as to which lenders have the most helpful policies in your area.

How long at the job? What is your job history for the past 2 yrs? And is it the same industry?

Most lenders will call your employer and verify your work employment, etc. so if the information aligns with what you put on an application which they approved you for = GREAT!
If you can verify your income and source of funds for the past 2 yrs that is all the lender needs and doesn't matter your employment after August as long as you are employed today (or duration of mortgage) and income shows the same pattern.
There are exceptions like you work for census or campaign/politician so you are unemployed after Nov or primary.

"For instance, most new teachers in this area are on 1 year contracts."

That is pretty far from 'temporary employment.'

They are contract employees, not 'at will' employees.

And I have never seen an interval as short as two years.

Maybe for someone just starting out.

If you do not have a solid work history you can expect for things like tax returns to be requested, just as if you are self employed.

Hi everyone! Thank you all so much for the information - it helps me to make sure all my bases are covered before I start looking, go to get pre-approved for a mortgage, etc.

My past work history is as follows:
Graduated college in May 2009
June 2009 - began working in my field through a temp agency
September - 2009 convinced my employer to buy out my temp agency contract and became full-time
June 2011 - left my former job to begin this "full-time temporary" job, a contracted position

So this June I will have had 3 solid years of employment in my chosen field, with the pay stubs and tax returns to back it up (well, tax returns for two years, but you understand...)

My original contract was to run out in March; it was just extended to August 31, 2012. At that point, it may be extended for another year (likely), I will be offered a permanent position (somewhat less likely, but not out of the question), or I will be let go (from what my boss is saying, far less likely, but I do know that unexpected things can happen).

Finding a lender who works with these situations is a great idea - I do work for a large, national company but their presence in my community is small. However, there are a lot of freelancers and other similar job situations in the county, so they must be working with banks somehow.

Again, thank you for the input - keep it coming with whatever else I may need to consider, it's very much appreciated.

"That is pretty far from 'temporary employment.'

They are contract employees, not 'at will' employees. "

Our teachers aren't even legally allowed to unionize. Unlike most states, teaching jobs are not particularly secure here - and that doesn't even get into teachers assistant etc. Most teachers are on 1 year contracts and administrators and assistants are only contracted for the school year not even a full calendar year. It is pretty amazing how different teaching is in a non-unionized state. Lots of teachers really don't have their contracts renewed.

"Finding a lender who works with these situations is a great idea"

Find a mortgage broker.

A single bank or lender only has their loan offerings available.

A mortgage broker can look over many lenders offerings and find one to fit your situation.

It may be as simple as grouping your loan in with some others that might look better to the lender, and offering all the loans as a 'package deal.'

You never know unless you try. Good luck!

Three and a half years later, this person is probably not following this any longer and may not be at the forum. I think the best advise here is to talk to a couple of broers before applying. They know what products they have, which lenders are looking for what segment of the market and what your best chances are. They can target the application or tell you what you need to do to improve your situation first. Going to a single bank and getting turned down could actually put you in worse position.

Also, it's not a bad idea to have something you have to pay off in your credit history - as suggested in the comments about not carrying a balance. If you don't have a car payment, consider buying a piece of furniture, an appliance (may not need if renting but could be a tv), mattress when you are offered "free financing" or no interest for a period of time. It's not exacly "free" but if it's factored into the price, the price is good and you aren't going to get a cash discount, take advantage of it. Even if you could afford to buy the item outright, mae payments for at least 6 months to a year. Then you could consider paying off any balance early, That develops more "credit" history than billing history (never carrying a balance).

So I know we resurrected a dead thread here, but to add to it. There is a significant difference between temporary and renewable contract. At the University I work at, all non-tenured faculty are on 9 month contracts. Contracts expire every May and are renewed at that time for an August start. Pay is distributed monthly and includes the three months that you are not technically employed. During the summer you can teach for extra money or you can work a different job, because of conflicts over intellectual property they actually release you from your employment for three months. None of this is reported to people who call. If your contract is renewed, you will be reported as a full time employee. Your contract status is never reported. Most expiring contract work is like this. Banks don't care. No employee has a guaranteed job in the future, banks know it, and calculate the likelihood by how long you have been there.

Hi my spouse has permanent employment and i am on one year contract full time job with good earning..are we eligible to get mortgage for buying home in gta as first time home buyer

gta???

If that's Greater Toronto Area, yes. But probably best to deal with a mortgage broker.

Re: advice upstream: If you do get turned down in one place, keep shopping banks.

Inadvisable, as every lender's credit inquiry will lower your credit rating. And the credit record will show you're shopping around and being rejected, otherwise you wouldn't be making a new application requiring a new inquiry. I manage a portfolio of equity mortgages and that's exactly our perception.

I consider, you have all chances to get a mortgage. Not so long time ago my cousin had the same problem. She wanted to get a mortgage though she had a temporary job in the It company. First, I recommended her to talk with the high qualified specialists so don’t have any misunderstandings in the future. She followed my advice and addressed to Hull Moneyman company. They have advisors, apprentices, administrators. So, no doubts you’ll get answers to all your questions. They could help my cousin to find a mortgage deal which corresponded all her needs. I can say that Mortgage Advice Hull offer you a free, no obligation mortgage consultation and this is not the least when you want to get a mortgage.