Getting a mortgage during your probationary period at a new job isn’t always easy. But, with the right mortgage lender, it is possible.
Below, you’ll see why getting a mortgage while you’re on probation at work presents an extra challenge and what you can do to improve the odds of getting your application approved.
Getting a mortgage during your probationary period: The challenges
Probationary periods are really common, right? So why do they make it more challenging to get a mortgage?
Essentially, it’s because mortgage lenders see you as a higher risk at this point. They’re concerned that you might not hold on to your job because:
- While you’re on probation at work, your employer is usually able to dismiss you with a week’s notice (or even less).
- The newest employees are often the first to be let go if a company has financial difficulties and needs to make job cuts.
So, if lenders see your employment as less secure, they get worried that you might not be able to keep up with your monthly mortgage payments in the future. That’s why they’d rather wait until you’ve completed your probation and been made permanent before offering you a mortgage. Usually, this means being employed for six months or more.
Many mortgage providers will also want to see at least three months’ worth of payslips from you as proof of income. That’s something you might not have if you’re still in your probationary period.
Getting a mortgage at this time may mean ruling out many of the larger, mainstream mortgage lenders and finding a specialist lender who’ll be willing to consider your individual circumstances.
What can help you get a mortgage during your probation period?
Here are our top tips for leaping over the hurdles and securing a mortgage during your probationary period:
- Use a mortgage broker to find a specialist lender. A whole-of-market broker, like Habito, can help you find a specialist lender who understands the needs of people in your situation. That way, you can reduce the risk of your mortgage application being declined (which can affect your credit score if it happens multiple times).
- Collect all the information about your employment. A potential lender will want to know everything they can about your work situation so that they can have confidence in your job prospects. They may want to see a signed employment contract and a letter from your employer confirming the details of your role.
- Provide proof of work experience. It may be a big help if you can prove that you have at least one year’s work experience in the same sector as your new role. That tells a lender that, even if you don’t pass your probationary period, you have a good chance of getting another comparable job quickly – making it more likely that you’ll keep up with your mortgage payments.
- Put in a bigger deposit (if you can). If you’re able to provide a larger deposit, that could open up a greater range of mortgage deals for you, with lower rates of interest (meaning lower monthly payments). That’s because the more of your home you own outright, the less of a risk you are to a lender – they stand to lose less if your property falls in value.
It’s also helpful to note that you might have an easier time getting a mortgage during your probation period if you’re a public sector worker. That can include NHS workers, teachers, public transport workers, and police officers.
Why? Because many lenders consider public sector work as more secure. In their eyes, if you’re unable to keep your current job, you have a good chance of getting another in a similar field without too much hassle.
Getting a mortgage while you’re on probation at work: FAQs
Here are some common questions we see about applying for a mortgage during your probation period, with our answers.
Does the length of your probationary period make a difference?
The exact length of your probation period (usually around three to six months) isn’t likely to make much of a difference to your chances of getting a mortgage. Many of the bigger lenders simply won’t consider applicants at all while they’re on probation at work. And for specialist lenders who are willing to consider you during your probationary period, the length of that period is just one of the many details about your employment they’ll want to know.
However, it could be an issue for more cautious lenders. That kind of lender might be willing to approve your mortgage application, but wants to delay releasing the actual money for your mortgage until you’ve completed your work probation. That might be fine if you have a short probation period (or you’re near the end of it), but it could cause problems if your probation period is longer and you have to move soon.
So, it’s worth double-checking the terms of your mortgage offer to make sure the money will be released when you need it.
Should you wait to get a mortgage until you’ve finished your probation period?
If you’re able to wait until after your probationary period to apply for a mortgage, you’ll probably find that you have a lot more options to choose from. Many lenders will approve your application if you’ve been in steady employment for at least six months, so you’ll no longer be restricted to the more specialist mortgage providers.
Something else to consider is that during your probation period, lenders may base the amount they’re willing to lend you on your basic salary alone. That is, they won’t take into account any overtime pay, bonuses, or commission that you’re likely to receive in the future. So, if you wait until you’ve passed your probation to apply, you might be able to borrow more.
Delaying a potential career change until you’re settled in your new home could also be an option for you. Although, if your new job is likely to come with a higher salary, you might not be able to borrow as much for a mortgage now as you could a few months down the line.
Yep, there’s a lot to think about! You can always chat with one of our mortgage advisors if you’re unsure about your next steps.
Can you remortgage your home during your probation period?
Yes, you can. But, as with a first mortgage, you may face a few extra challenges if you try to remortgage during your probationary period. You’ll have fewer lenders and deals to choose from.
Again, it’s not impossible. You just need to find the right lender who understands where you’re coming from.
Help with getting a mortgage during your probation period
If you’re looking to get a mortgage while you’re on probation at a new job, Habito can help.
We’ll search the whole market to find you a mortgage that’s perfect for your situation. No stress. And it’s free! Chat to us today.