When applying for a mortgage, you have to prove to a lender that you will be able to pay the money back monthly. Most mortgage lenders you approach are going to want to see three months’ worth of bank statements and three months’ worth of pay slips, meaning you would need to be employed for a minimum of three months. However, it mainly depends on your circumstances, for example, a continuation of employment or being employed prior to starting this new job. And ultimately, it depends on the lender’s criteria, they all vary.
You could potentially be turned down for a mortgage as lenders think it’s riskier after you start a new role. This is because you’ll be unable to make your repayments if you lose your job. Lenders think it is a risky time because:
In some cases, a change in job won’t greatly impact your mortgage application. Being on a higher salary can increase what lenders think you can afford to borrow. So if you can prove your new salary by getting your employer to confirm it in writing, you might be in a better position.
Also, if you get a pay rise during your mortgage application, you’re more likely to then want to get a mortgage that reflects your increased income. If you can get written evidence from your company explaining about your recent pay rise and detailing whether it is permanent or not, then your application will not be affected and could potentially increase the amount you can borrow.
But if your salary decreases, the amount you can afford to borrow/payback towards a mortgage will go down. If you’ve already started your application you must make your broker or lender aware of your new salary, this is so they can make sure that you are still eligible for that particular mortgage offer.
If your salary is lower but you get bonuses or commission, you need to try and show your broker or lender how much you could potentially earn. If you have been in your job for a little while, your payslips should already prove this but getting written confirmation of guaranteed bonuses or commission you may earn, might help.
If you go self-employed, you can still get a mortgage but, like the others, you still need to be able to prove your income. Lenders usually need to see your statements and accounts for at least the past year but some like to see three or more years. Therefore you may not be able to buy a house immediately after going self-employed.
Waiting until your probation period is over and you’ve been in the role for more than 6 months might potentially be a good choice and will be enough for some lenders. But on the other hand, you could stay in your job until you’re settled down in your new home… ultimately the choice is yours.
Contacting a mortgage broker might be the best choice as they can advise you and look at deals put out by lenders. Brokers can let you know if and who might accept you and can tell you what the next steps are for your mortgage application.
You can also potentially increase your chances if you have a larger deposit to put towards the house.
If you already have a mortgage and are looking to switch, getting a new job can make it harder to get a new deal. If your new job has a lower salary, affording your monthly payments can be more difficult. Looking at budget planner might be a good idea so you can keep up with your payments.
For those of you looking to get a joint mortgage, rather one partner self-employed and the other employed, or both self-employed or even both employed, you’ll still be required to provide three months’ of bank statements and three months’ of pay slips. Again, it depends on the circumstances listed earlier.
If you’re looking for a mortgage but have only recently become employed, get in touch and seek advice. It can take 6-24 months to prepare for mortgage success, to ensure you do not miss out on your dream home and to get all your ducks in a row, book a free strategy call so we can ensure that you have everything in place to maximize success.
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