Mortgage with New Job: Is it Possible?

Attention New Job Mortgage Seekers

Just started a new job and dreaming of your own home? Don’t worry, you’re not alone. Many people are in the same boat, wondering if they can qualify for a mortgage with a new job.

The good news is that getting a mortgage with a new job in the UK is possible. However, there are a few things you need to keep in mind to increase your chances of success.

As a mortgage broker, I’ve helped hundreds of people with new jobs get mortgages. I know it can be a daunting process, but I’m here to help you every step of the way. In this article, I’ll explain what lenders look for in a mortgage applicant with a new job and how you can increase your chances of getting approved.

Post Topics

Why Is Getting a Mortgage with a New Job a Concern?

Can I get a mortgage with a new job?

What Are the General Eligibility Criteria for Mortgages in the UK?

What Challenges Do You Face When Applying for a Mortgage with a New Job?

How Can You Secure a Mortgage If You’ve Recently Started a New Job?

Next Steps

Frequently Asked Questions 

Why Is Getting a Mortgage with a New Job a Concern?

Securing a mortgage is a significant financial commitment, and lenders are understandably cautious when assessing applicants. One of the factors that can complicate the mortgage application process is a recent change in employment.

Firstly, mortgage lenders are looking for stability. A stable employment historyA record of a borrower's employment history, which may be us... generally indicates a reliable income, which in turn suggests that you’ll be able to meet your mortgage repayments. A new job can be seen as a period of uncertainty, both for you and the lender. There’s often a probationary periodA period of time during which a borrower's employment is pro..., and there’s no long-term proof that the employment will be stable.

Secondly, the type of employment contract you have can also impact your mortgage application. Permanent roles are generally viewed more favourably than temporary or contract roles, which are often associated with new jobs.

Lastly, suppose you’ve switched industries or roles. In that case, lenders may be concerned about your ability to maintain a consistent income, especially if your new job comes with a variable income structure such as commission-based pay.

In summary, while a new job is often a positive life change, it can introduce complications when you’re applying for a mortgage. Understanding these challenges is the first step in navigating the mortgage landscape successfully. We would suggest you contact a specialist mortgage broker before starting your mortgage application with a new job role.

Can I get a mortgage with a new job?

Yes, it is possible to get a mortgage with a new job, but it may take some extra effort. Most lenders require applicants to have been in their current job for at least three months before they will consider a mortgage application. However, there are some lenders who are more willing to consider applicants with new jobs, especially if they have a good credit history and a stable income.

If you have been in your new job for less than three months, you may have to work with a specialist lender. These lenders are more willing to consider applicants with new jobs, but they may have higher interest rates and fees.

Don’t give up! It is possible to get a mortgage with a new job, but it may take some extra effort. With the right preparation and the help of a qualified mortgage broker, you can achieve your dream of homeownership.

What Are the General Eligibility Criteria for Mortgages in the UK?

Before diving into the specifics of how a new job can affect your mortgage application, it’s essential to understand the general eligibility criteria that lenders consider when assessing mortgage applications in the UK.

The primary factors usually include

1. Credit Score: A good credit score is crucial for securing a mortgage. It gives lenders confidence that you are financially responsible and likely to meet your repayments.
2. Deposit: The size of your deposit can significantly impact your mortgage application. A larger deposit usually results in more favourable mortgage terms.
3. Income: Lenders will assess your income to ensure you can afford the mortgage repayments. This includes not just your salary, but also any other sources of income you may have.
4. Debt-to-Income Ratio: This ratio compares your monthly debt payments to your monthly income. A lower ratio is generally more favourable.
5. Property Value: The value of the property you’re looking to buy also plays a role. Lenders will often require a property valuation to ensure the loan amount is appropriate.

Employment status is another key factor, and it’s where a new job can introduce some complexities. Lenders may ask for employment history, pay slips, and even references from employers to gauge the stability of your income.

Understanding these general criteria can help you better prepare for the mortgage application process, especially if you’ve recently started a new job.

What Challenges Do You Face When Applying for a Mortgage with a New Job?

Now that we’ve established the general eligibility criteria for mortgages in the UK let’s focus on the specific challenges you might face when applying for a mortgage with a new job.

1. Probationary Period: Many new jobs come with a probationary period, during which your employment is not fully secure. This can be a red flag for mortgage lenders who are looking for long-term stability.
2. Income Verification: With a new job, you may not have enough payslips or a long enough employment history to satisfy a lender’s income verification requirements. In this case, you can also provide a job offer letter to help with your mortgage application.
3. Employment Type: If your new job is a contract or temporary position, this could make securing a mortgage more difficult than permanent roles. For example, key workers such as NHS workers may be able to access more favourable mortgage terms.
4. Industry Change: If you’ve switched industries, lenders may be concerned about your ability to maintain a consistent income, especially if the new industry is considered volatile.
5. Variable Income: Jobs that come with a variable income, such as commission-based roles, can also complicate the mortgage application process.
6. Lack of Employer References: Since you’re new to the job, you may not be able to provide employer references, which some lenders may require for additional verification.
7. Timing: The mortgage application process can take time, and if you’re in a new job, you may not have the luxury of waiting for the best mortgage deal to come along.

Understanding these challenges can help you prepare for the mortgage application process and potentially improve your chances of approval despite the complexities introduced by a new job.

How Can You Secure a Mortgage If You’ve Recently Started a New Job?

While a new job can introduce some hurdles in the mortgage application process, it’s not an insurmountable challenge. Here are some practical tips to improve your chances of securing a mortgage with a new job:

1. Gather Documentation: The more evidence you can provide to show that your income is stable and reliable, the better. This could include an employment contract, offer letter, or even a letter from your employer confirming your employment status.
2. Consider a Joint Mortgage: If you’re applying with a partner with a more stable employment history, this could strengthen your application.
3. Speak to a Mortgage Broker: Mortgage brokers have a wealth of experience in dealing with various lenders and can guide you to those more likely to approve your application, given your new job.
4. Opt for a Smaller Loan: If possible, consider applying for a smaller mortgage amount. A lower loan-to-value ratio can make you a less risky prospect to lenders.
5. Improve Your Credit Score: A strong credit score can offset some of the risks associated with a new job. Make sure to check your credit report and correct any errors.
6. Be Prepared to Explain: If you’ve switched industries or roles, be prepared to explain the reasons behind the change and how it will positively impact your financial situation.
7. Timing: If you can, try to time your mortgage application for after your probationary period has ended, as this will make you a more attractive candidate to lenders.

By taking these steps, you can improve your chances of securing a mortgage, even if you’ve recently started a new job.

Next Steps

If you have just started a new job or are about to start but are 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 a suitable mortgage provider.

Frequently Asked Questions

Can I apply for a mortgage if I’ve just started a new job?
Yes, you can apply for a mortgage with a new job. However, most lenders prefer that you’ve been in your current role for at least three months. Some specialist lenders may consider your application even if you’ve been in your job for less than that, although they might charge higher interest rates.

How does a probationary period affect my mortgage application?
A probationary period can make lenders cautious as it’s a time of employment instability. You may find it challenging to secure a mortgage during this period. However, some specialist mortgage brokers can guide you to lenders who are more flexible regarding probation periods.

What role does my credit score play in getting a mortgage with a new job?
A good credit score can significantly boost your chances of mortgage approval. It shows financial responsibility and can offset some of the risks associated with having a new job. Make sure to check your credit report for any discrepancies before applying.

What types of income verification are required for a mortgage application when I have a new job?
Lenders typically ask for several months of payslips, an employment contract, and sometimes even employer references. If you’re new to your job, an offer letter or a statement from your current employer can also help in the mortgage application process.

How does the type of employment contract affect my mortgage options?
Permanent roles are generally viewed more favourably by lenders compared to temporary or term contracts. If you’re in a temporary role, you may need to consult a specialist mortgage broker to explore your mortgage options.

Is my debt-to-income ratio important when applying for a mortgage with a new job?
Yes, your debt-to-income ratio is crucial. It compares your monthly debt payments to your monthly income. A lower ratio is generally more favourable and indicates that you can afford the monthly mortgage repayments.

Can I get a joint mortgage if my partner has a more stable employment status?
Yes, applying for a joint mortgage with a partner who has a stable employment history can strengthen your mortgage application and improve your chances of approval.

What is the role of a specialist mortgage broker in this scenario?
A specialist mortgage broker can guide you through the complexities of the mortgage market, especially if you’ve recently started a new job. They can direct you to lenders who are more likely to consider your individual circumstances.

How do I improve my chances of mortgage approval with a new job?
Gathering ample documentation like proof of income, improving your credit score, and possibly waiting until your probation period ends are some ways to improve your mortgage chances. Consulting a mortgage adviser for tailored mortgage advice can also be beneficial.

Can I still get a favourable mortgage rate with a new job?
While a new job can introduce some uncertainty, a larger deposit, a good credit history, and a stable income can help you secure a more favourable mortgage rate. It’s advisable to consult a mortgage expert to explore your options.