A mortgage is likely to be the biggest financial investment and commitment that you will ever make. When taking on this big step, you want to make sure that you are getting the most suitable deal for you. Several factors impact your eligibility, how much you can borrow, and the deals that you are offered, one of which comes down to your employment. If you’re looking at applying for a UK mortgage but are also thinking about looking for a new job, be sure to read on to see how this could affect you. From how long you should be in a job before getting a mortgage in the UK to the implications of contract changes, we’re answering all your burning questions.
find me a mortgageHow long in job before mortgage (UK)?
When reviewing your application, most lenders will want to see that you have a sturdy, stable job before offering you a mortgage. This means, as a general rule, it’s probably best to hold off the job search until you have your mortgage sorted. Not only will it make the application far smoother, but it also gives you peace of mind that you know exactly how much your monthly repayments will be before making any changes that may impact your wage.
If you have no choice but to switch jobs now, it’s recommended that you are with your employer for at least 3 – 6 months, so it might be that you push back the mortgage application until you’re a little more settled in your job. This will mean that you have a few months’ worth of payslips to prove your earnings, have most likely passed your probation period and are nicely settled in your role.
If you’ve been in your new job for a few months now, then it’s time to start looking at the mortgage options that are available to you. You can get started by getting a free quote through our handy online mortgage calculator. We also have a whole host of helpful guides that will clear up some of the confusion surrounding the different types of mortgages.
Please note that the quote calculator is for illustrative purposes only. Any mortgage offer may differ depending on an individual’s specific circumstances.
Will changing jobs stop you from getting a mortgage?
Changing jobs won’t stop you from getting a mortgage, but while it doesn’t make it impossible, it will make it harder. There are lenders out there who are willing to offer mortgages to those who have been in a job for under three months. On the other hand, some of the top deals may not be available to those who have been in jobs for under three years. It’s a tough decision to make, so if you have the luxury of staying in a long term position, it may be something to consider if you are aiming to own your dream property.
If you have recently changed job and are looking for a mortgage, you do still have options, but your best and safest bet is to hold out a little longer to get a few months in your current role under your belt.
The reason that many lenders are reluctant to lend to those in new positions are for two main reasons:
The only benefit you may find when applying for a mortgage with a new job is seeing a dramatic increase in earnings. As you won’t have the required number of payslips to prove it, you will need written confirmation from your employers. Although it won’t guarantee you a good deal (or even an offer at all), it can help.
Check AffordabilityCan a change in contract or pay rise impact a mortgage application?
Signing a new contract or receiving a pay increase from your existing employer won’t negatively impact your application, but it may create a bit of a paperwork nightmare, so it is something to keep in mind as you are applying.
As part of the application process, you are often asked to provide multiple recent payslips to prove your income. While you would want a mortgage offer that reflects your new and improved salary, you may not yet have the documentation to prove this is your regular income. If you can, pause your house move until you have at least three months worth of payslips at your new wage to use in the application. Alternatively, you may be able to get some written confirmation from your firm’s HR department, but not all lenders may accept this.
What if my income relies on bonuses or commission?
Those with a low base salary that boost their earnings with commission or bonuses are still eligible for good mortgage deals if there’s a relatively steady monthly income. You will just need to provide evidence via the payslips of your average monthly earnings. Again, at least 3 – 6 months would work, but more is ideal, so the longer you have been in the role, the better your chances will be.
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Getting a mortgage if you’re going self-employed
Maybe instead of getting a new job with another company, you’re looking to take the leap and go self-employed. While there are lots of benefits to being your own boss, there is lots of uncertainty in the eyes of a mortgage lender. When it comes to submitting a mortgage application as a self-employed worker, lenders often ask to see lots of documentation to prove your income. This is usually anywhere from 1 – 3 years worth of statements and accounts. It’s a big job to get all of this in order, but if you’ve recently made the switch to being self-employed, you may struggle to gather enough information for a successful application.
Need more help securing a mortgage? The friendly, knowledgeable WIS Mortgages team are on hand to help with free advice. We’re committed to helping every single one of our clients get a mortgage deal to suit their needs. Get in touch today, and a member of our team will be happy to answer any questions you may have.
Note: As a mortgage is secured against your home, it may be repossessed if you do not keep up the mortgage repayments.
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