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Mortgage with New Job
Starting a new job whether to embark on a new career or for a better wage is an exciting prospect but it could make it more difficult to get a mortgage because a lender may view you as a risky borrower. Many lenders will decline an application if the applicant haven’t been in their job for 12 months, or sometimes even 3 years. We discuss below how it is possible to get a mortgage when you have just started a new job.
Can I get a mortgage if I have just started a new job?
Most lenders require for applicants to exhibit stable employment with the same employer for a set period of time which can make it difficult for borrowers to get a mortgage when they have just started a new job but it isn’t entirely impossible, it is about finding the right lender for your personal circumstances. Lenders are increasingly more aware that in current times and the current climate, it isn’t uncommon for people to change their jobs often. Besides income and your employment status, there are other factors which lender will examine as part of their decision making process, such as your credit history, age and outgoings.
Every lender’s criterias and requirements differ and it is about finding the right lender for you. The benefit of a professional advisor is that they have access to a wide panel of lenders on and off the high street that you may not be able to have accessibility to.
Why is it difficult to get a mortgage when you start a new job?
As part of lenders’ assessment of a mortgage application, they will ask the borrower usually for at least 3 months’ wage slip, sometimes more as proof of their income. If you have just started a new job, you will not be able to produce this but some lenders may accept a letter from your employer which confirms your salary in place of wage slips. Another option is to delay your mortgage application and wait a few months till you have enough wage slips but there are instances where it is necessary for someone to buy a new house at the same time as starting a new job so finding the right lender is critical.
It is best to find the right lender before applying for a mortgage as a declined application can have an effect on your credit report which may make it even more difficult to be accepted for a mortgage loan once you do have been in your employment for long enough.
Lenders will be wary if you are in your probation period as this is not a guarantee that your role will become permanent and your contract could be terminated during this notice period. They also see new starters as higher risks because usually if a company needs to make job cuts, the newest employees are usually made redundant first.
If your basic salary is lower or most of your income is commission or bonus based, it could make the process more difficult as lenders may think you have less income to afford the borrowing or that your income isn’t steady enough for them to be certain you can keep up with the repayments. If you suddenly become self-employed, you may find this stops you from buying a house straight away since lender usually require to see an account history to support an application.
How to improve your chances of getting a mortgage
If you are earning a higher wage than previously, this can be beneficial to help boost your application as lenders will take into account that you can better afford the mortgage repayments but you may be required to ask your employer to show the lender written proof of this. Lenders will assess an applicant’s income compared to their outgoings such as living expenses and bills and this will give them an idea of whether the borrower will be able to afford the monthly repayments and not fall into arrears.
Having a larger deposit for any type of loan is favourable but more so in this position and it can help strengthen your application if your loan to value (LTV) ratio is low.
A good credit history is extremely important in this process as lenders may favour someone who has started a new job and a good credit score over someone who has been in their job for a while but has bad credit history. This demonstrates to them how risky someone is for a loan.
If you have just started a new job or about to start but also looking to get a mortgage and would like to speak to a professional about finding an appropriate lender for your circumstances, then get in touch with us today. We can save you time from contacting lenders yourself and direct you and match you up to suitable lenders.