Will changing job affect my mortgage application?
Changing jobs could have a significant impact 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:
- A probation period. Your contract could be terminated at short notice and with less explanation during your probation period.
- Redundancy. Newer employees tend to be let go first when companies are making redundancies.
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.
What job changes might concern mortgage lenders?
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.
What if I’m becoming self-employed?
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.
What can you do to convince the lenders to approve your mortgage?
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:
- An official offer of employment detailing your start date, title and pay.
- Any recent payslips you’ve been given, if applicable.
- Contact details for the Human Resources department.
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.Back to top
More guides on Finder
The Warm Home Discount Scheme explained
Find out who gets the Warm Home Discount automatically, who needs to apply and how to do it. Plus more tips for saving on your energy bills.
A beginner’s guide to cryptocurrency ETFs
If you’re looking for ways to gain exposure to Bitcoin and other digital currencies, cryptocurrency ETFs could be worth exploring. Find out what crypto ETFs are and how they work in this introductory guide.
Finding, transferring and combining your pensions
Find out how to find all your pensions and the rules and risks if you want to transfer or combine pensions.
Ethereum (ETH) price prediction 2021
What affects the value of Ethereum (ETH) and how might the price of ETH fluctuate in the year ahead? Find out in this comprehensive guide.
Bitcoin (BTC) price prediction 2021
Your guide to the factors affecting Bitcoin’s value and what to look for when forecasting bitcoin price changes in the weeks and months ahead.
What is a good credit score?
Find out the difference between a credit score and a credit report, plus the factors that can push your score up and down.
Subaru Impreza insurance group
Find out which insurance group the Subaru Impreza falls under and how much it costs to insure.
What you need to know about getting a mortgage if you’re buying or refinancing a farm or farmland, including the factors lenders consider when you apply for one.
Mortgage for a pub
Everything you need to know about taking out a mortgage to buy or refinance a pub. Find out where to get one, how to get the best deal and the factors lenders consider.
Mortgage for a hotel
In-depth guide to taking out a commercial mortgage to buy or refinance a hotel. Find out how to get the best rates, factors lenders consider and what you need to apply.
Ask an Expert