If you’ve recently started a new job some lenders may be more cautious about lending to you, but in most cases, you should still be able to find a favourable mortgage. If you’re able to delay your house move or hold off on taking the new job, then there may be more mortgage options available to you, but if you need to act now, this guide will help you understand your situation so you can make the right decisions.
Why Can it Be More Difficult to Get a Mortgage With a New Job?
There are a few points to be aware of when looking for a mortgage after taking on a new job, as we’ll discuss below.
Probation Period
You may find it hard to secure a mortgage if you are on a probation period at your new job, as during this time your employer can terminate your contract without giving notice. Most lenders will require you to be on a permanent contract before they accept your application, however, with the help of a whole of market mortgage broker you should be able to find a provider who is willing to lend to you during your probation period.
Cuts & Redundancies
If you are on a permanent contract but you haven’t been with the company for long, most lenders will perceive you to be a higher risk borrower, and therefore your choice of products may be more limited and have more unfavourable terms. Most companies work on a ‘last in first out’ basis, meaning if your employer needs to make cuts in the coming years you could have a higher chance of being made redundant compared to colleagues who have been with the company for a long time, and lenders will factor this risk into their offers.
Payslips & Proof of Earnings
Many lenders require at least 3 months of payslips to satisfy their affordability checks, but some will ask for up to 3 years worth and others don’t need to see any at all. So if you can wait until you’ve been at your new job for at least 3 months you’ll have more options to choose from, but if you need to act sooner, a whole of market mortgage broker should be able to find a deal that works for you.
How Can an Increased or Decreased Salary Affect Me Getting a Mortgage?
If your salary has decreased, then it’s likely your borrowing limit will also decrease accordingly. This means you’ll either have to raise a larger deposit or look to buy a property worth less than you would have on your previous salary. If you started the application process before taking the new job, be sure to inform your mortgage lender of your new salary to prevent problems down the line.
If your salary is increasing you shouldn’t have too much trouble getting a mortgage. However, you’ll likely want to borrow based on your new higher salary as this should produce a higher borrowing limit and more favourable terms. If you can’t yet provide payslips, try to get written proof of your new salary from your employer as this will satisfy most lenders.
How Can I Get a Good Mortgage When Starting a New Job?
In this section, we’ll summarise the main points which will give you the best possible chance of securing a favourable mortgage when starting your new job.
- If you are on a probation period, try to get written proof from your new employer detailing your future permanent contract.
- If your salary has increased but you don’t have payslips yet, try to get written proof from your new employer to give to your lender.
- Raising a larger deposit can help to offset any perceived risk to the lender by reducing the loan to value.
- Savings, pensions, or a second income (if applying for a joint mortgage), can help to satisfy lenders’ affordability checks.
- Use a whole of market mortgage broker to ensure you have access to all available products, including any exclusive deals, and to gain valuable knowledge of each lenders’ criteria.
The Bottom Line
If you’ve recently started a new job, your mortgage options may be more limited but you should still be able to find a product that suits your needs. The key to finding the right mortgage for your situation is to find the right lender. Therefore, it’s more important than ever to speak to a whole of market mortgage broker who understands the criteria of each lender – not only will they be able to find a suitable deal, but they’ll also prevent you from applying to lenders who are likely to reject your application. Being rejected for a mortgage can damage your credit score, so having an experienced advisor by your side can be invaluable.
Book in for your FREE consultation and one of our friendly advisors will assess your situation and search the whole market of mortgage products to find a deal that suits your needs. If you’re happy to proceed, we can apply on your behalf – liaising with estate agents, solicitors, and lenders to make it easy for you. We can help you remotely via phone or video call, so book in for your FREE consultation today and let’s get you moving. We look forward to helping you!
