Changing employment and applying for mortgages
In general, the less time you’ve spent working for your current employer, the more of a risky investment you’ll be considered by the lender.
But while you may have to hunt around a bit to do so, you will be able to find a mortgage if you’ve recently started a new job and we’re here to help you do just that.
In This Guide:
- Taking out a mortgage with a new job
- Taking out a mortgage when changing contracts
- Mortgages and pay rises
Taking out a mortgage with a new job
For a number of reasons, mortgage providers tend to look rather sceptically on those who’ve been in a job for less than a year, making it harder to borrow if you’ve recently started work with a new employer.
One of the key reasons is that when it comes to enforcing redundancies, companies tend to operate on a last in, first out basis. This means, rather simply, that your position is less secure if you’ve spent less time in it. This adversely affects your credit rating and so makes you a more risky candidate to lend to.
Some lenders will require you to have spent as much as three years in the same job before offering you a mortgage, though some will ask for as little as three months and some will be happy to lend right from the start. It all depends on the particular bank or building society and so you should make an effort to search around the market before giving up.
If you’ve started a new job and are on a probation period, taking out a mortgage will be tricky as the lender has no guarantee that your employment will be permanent. Again though, this is not the case with all mortgage providers so make sure you scan the market to see what you can get.
However long you’ve been in a job, we’ll help you get the best mortgage rates possible so that you can start borrowing and move into your new house as soon and as cheaply as possible.
Taking out a mortgage when changing contracts
Changing contracts with the same employer can present problems when you are asked to provide the mortgage provider with multiple payslips to prove your income.
This is more of a logistical issue than anything else though and so as long as you can explain your situation to the lender you should be fine. Ideally you should have some kind of written evidence from your company’s HR department explaining your position in order to cover all bases.
Mortgages and pay rises
If you’ve recently had a pay rise you’re likely to want a mortgage with a repayment plan that reflects your increased income. However, as is the case with a general change in contracts, the likelihood is that you won’t have multiple payslips available to demonstrate the consistency of your income to the mortgage provider.
Again though, if you can provide written evidence from your company explaining that your recent pay rise is permanent, then you should be absolutely fine applying for a mortgage with it in mind.