Can I get a mortgage with a new job?
Yes, you can. However, getting a new job can affect your chances of being accepted as most lenders favour career stability and prefer to see that you’ve been with your employer for a lengthy period of time. The desired length of time in your role will differ from lender to lender. Some lenders may accept you with as little as 3 months in your role, whilst others will want you to have been in your job for more than 3 years. Even if your new role is the best decision for you, or if it means more income, in the eyes of a lender it can mean instability, and instability can mean increased risk. If you don’t meet the lender's minimum requirements, you may need to do more work to prove that you can meet the monthly repayments before they approve your application.How lenders view employment and income
For a standard mortgage application, you will need to provide 2-3 years of work history. If you’ve been in your job for that long, no further questions should be asked. However, if you’ve spent less than 2 years in your career, this is when your employment history will be questioned. Here is what lenders look for:- How often you change jobs
- Extended periods of unemployment
- Increases in pay and promotions
- Work history within the same field
- The health of the industry or company
- Your qualifications and training
- Jobs that match your training
Why might a lender reject my mortgage application?
If you’ve only just started in your new role, lenders will view you as high-risk and therefore may be reluctant to offer you a mortgage. A mortgage lender will be concerned that you may lose your job for these reasons:- Probationary period: All new jobs have a probationary period. This period allows the company to terminate your employment without notice.
- Redundancy: If the company you’re working for needs to make alterations to staffing, the newest employees are often the first to be let go.
What happens if I get a promotion?
Even though promotion is usually paired with a salary increase, this won’t be of benefit to your mortgage application until you can show the higher annual salary on payslips that cover 3-12+ months - depending on your lender. Once you have been in your role for the desired length of time, an increased salary will increase your affordability calculation and you may even be able to borrow more. If you can, we advise that you wait a little bit longer before submitting your application, for your best chance of getting the best deal on your new home.What happens if I get a pay cut?
There are many reasons you may take a pay cut when you move jobs. However, if your new role pays less than your previous role, you’ll have fewer funds available to pay towards your repayments each month.I want to become self-employed, will this affect my mortgage application?
Deciding to work for yourself means you take the risk of having fluctuations in your income, especially if you are just starting out. If you decide to work for yourself, you can still get a mortgage, but you will need to prove your income. Lenders will want to see statements from your accounts for at least the past year, and may even ask for more than 3 years. If you’re leaving your conventional employment to start your own business, you may need to delay buying your home for a few years, until you are earning a consistent income and can provide lenders ample proof.Does the industry of my new job make a difference?
The length of time a lender will require you to be in a job to be accepted for a mortgage will often depend on the industry of your new role. If you’re starting a new contract within the same company or moving to a job within the same field on a healthy income, then your lender may be able to give you more favourable options - compared to if you were moving to a completely new industry. Jobs in teaching, policing, armed forces or working in the NHS generally make it easier to get a mortgage when changing jobs. This is because lenders will assume that if you were to lose your job, you would be able to find a similar one with a similar salary relatively easy.How to improve your chances of being approved for a mortgage while switching jobs
If you are applying for a mortgage whilst simultaneously switching jobs there are a few things you can do to help yourself secure a better deal:- Gather information on your employment status
- Pay a larger deposit
- Use a mortgage broker
