Want to get a mortgage and thinking of changing jobs? Wondering if you’ll still be able to get your application accepted? Here’s what you need to know…
You want to get a mortgage soon but might have recently changed jobs. Or you may want to apply for a mortgage and be thinking about changing your role. Should you go ahead and move to a new company, or should you wait for a while?
The good news is that changing jobs shouldn’t limit your chances of getting a mortgage. So long as your new role is a permanent position and is in a similar industry to your previous role, you should be fine.
You may be wondering where you stand if you have a probationary period to complete. Again, it’s good news. ‘Assuming that the new role is a permanent, employed position – irrespective of whether there is a probationary period to serve or not – and assuming that it’s in a similar line of work to your current field there are plenty of lenders willing to support your application,’ says MB Associates’ Sales Manager Phil Leivesley.
Some lenders may ask to see your first payslip and bank statement showing your earnings from your new employer before they will lend but this is unusual. ‘There are a smaller number of lenders who require someone to have worked at their current employer for a defined period, but these are probably less than a handful,’ says Phil. ‘Again, assuming it’s a permanent role in a similar field, there are a lot of lenders out there who will lend to someone on the strength of a contract of employment that is set to begin anywhere up to three months into the future.’
Lenders will often ask about your employment history, but this is mainly to ensure that you are working for a reputable employer with a reasonable number of employees. In essence, they will want to be sure you work for a financially secure organisation.
Bear in mind if you start a new job, you may be on a higher salary, which will mean you can borrow more. If you take a job on a lower salary, this means you will be able to borrow less.
What if you’re thinking of going self-employed in the near future? Contrary to belief, it’s not impossible to get a mortgage when you work for yourself, but you do need to have a strong track record of consistent income. At present, it can be quite a challenging process for anyone who is self-employed. Some lenders will accept a year’s worth of income, but many will want to see at least two years’ worth of income or company accounts. You may not be able to buy a new property if you have just started working for yourself.
Finally, if you have recently been given a pay rise and would like to borrow more based on your new income, you will need to prove to a lender that you have been given the increase. While you won’t have three months’ worth of payslips, you can ask your employer to confirm your pay rise in writing. They will need to confirm that it’s a permanent increase. Some lenders will be willing to take this into account and lend based on your new, higher income.
Overall, some lenders are more flexible than others. This means it’s best to speak to an experienced mortgage broker who will know who to approach on your behalf. Feel free to contact us for advice on getting a mortgage.
If you are self-employed, download our free guide to getting a mortgage when you’re self-employed.