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
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