A new job might be exciting for you, but it could have a negative effect on your mortgage application.
Many lenders often see a new job as being less stable than one you have had for many years.
This is due to:
If you lose your job due to either of these reasons, you’ll be at serious risk of falling behind on your mortgage repayments.
As such, even if your new job provides higher pay, you may need to convince your mortgage lenders of its stability.
The best way to show them this is to wait until you’ve passed your probation period before applying for a mortgage.
However, if you remain in the same line of work on the same or higher salary, a brand new job is likely to be less of a big deal.
If you’re changing careers, this could raise more concerns, as you’re often perceived as being less likely to remain in the job.
If you’re switching to a job that’s partly commission-based, this could also cause problems, as your income is perceived as being less guaranteed.
If you’re turning self-employed or starting a business, this could ring even more alarm bells, as even less of your pay is guaranteed.
Some lenders require a couple of years worth of pay receipts before even considering approving a mortgage for self-employed applicants.
Any capital you borrow to launch your new business could also count against you in your mortgage application, as this is likely to decrease the spending power available to repay your mortgage.
| Response | Yorkshire and the Humber | West Midlands | Wales | South West | South East | Scotland | Northern Ireland | North West | North East | Greater London | East of England | East Midlands |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| No | 52.94% | 46.09% | 48.48% | 57.97% | 46.36% | 47.37% | 58.33% | 45.45% | 50% | 45.37% | 48.28% | 46.59% |
| Yes | 47.06% | 53.91% | 51.52% | 42.03% | 53.64% | 52.63% | 41.67% | 54.55% | 50% | 54.63% | 51.72% | 53.41% |
Most lenders will arrange an interview with one of their mortgage experts about your job change. This is your opportunity to show them proof that your job and pay is likely to be secure.
Give examples of the transferable skills you are bringing to your new career. Show them any payslips you’ve been given so far – and provide examples of the average commission that others in your job have made in the past.
Lenders will usually want to see the following documents:
There are some lenders that specialise in offering mortgages to self-employed applicants. If you’re becoming self-employed, you may have to apply to these specialists for a mortgage.
If you’re wondering whether to use a mortgage broker or go directly to a bank, we explore the benefits of a broker.
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