Waiting 6–12 months after starting a new job will give you more choices for your mortgage, and you’re less likely to have your application rejected. But if this isn’t an option and you need to move quickly after landing a new job, getting advice from Habito is a great place to start.
When you apply for a mortgage, lenders want to see proof that you can afford the monthly repayments. But if you’re applying just after starting a new role, it can be tricky to gather the information you need about your income to get a mortgage approved.
It’s not impossible though. With the right lender, you can still be accepted for a mortgage. There are also things you can do to make sure you’ve got a wider choice of deals.
How long should you wait before you apply for a mortgage? Some basic guidelines
Every lender is different, but, as a general rule, you’ll have to be employed in the same position for at least three months before you’ll be accepted for a mortgage.
That’s because mortgage lenders don’t like risk. Even if a new job is absolutely the right decision for you, in their eyes, change means instability. You’ll have more work to do to prove you have a stable income and can meet your monthly mortgage payments before they approve your application.
It’s not just being new in a job that can affect your chances of getting a mortgage, either. Career changes, even promotions within the same company can have an effect.
What about getting a mortgage during your probationary period?
Many companies put new employees on an initial probationary period before giving them their permanent contract. Although it’s very common, it can be a roadblock to getting a mortgage. There are three reasons for this:
- There’s no guarantee that your contract will be extended after the probationary period.
- Employees on probation can be let go with very little notice.
- The first people to be made redundant if a company gets into trouble are usually the last people who were hired.
The good news is that the months you work during your probation will usually count to your total continuous employment history in the eyes of your mortgage lender. Still, getting a mortgage can be even more challenging when you’ve just started a new job if you’re on a probationary period.
Read our complete guide to getting a mortgage during your probationary period.
What about a promotion?
So you’ve been promoted at work, and it comes with a healthy bump in pay? Sounds like a great time to invest in a property, right?
Sadly, mortgage lenders don’t always agree, meaning you’ll still have to prove your income over several months. Usually, you won’t be able to get the best mortgage deals until you can show your higher annual salary on payslips covering 3–12 months, depending on your lender.
The bottom line? If you want to buy the same kind of house you would have purchased before your promotion, this might be a great time to do it. If you want an extra bedroom or a bigger garden to suit your new salary, it's a good idea to be patient.
What about a pay cut?
There are plenty of reasons to take a pay cut when you move job. However, if you take a job that pays less than your previous job, you’ll have less to pay towards your mortgage each month. You're also less likely to pass the stress test that lenders do to make sure you can still make your monthly home loan payments if your circumstances changed.
You have to tell your mortgage lender about your new, lower salary if you’ve already been given a mortgage offer to make sure that they’re willing to follow through. Otherwise, you might have to start looking at less expensive properties.
What about going self-employed?
People in self-employment, on zero-hours contracts, or who work in the gig economy can sometimes have a fluctuating income. And no matter how well you make it work, it’s not always attractive to many high street mortgage lenders.
If you’re leaving conventional employment to start your own company or go freelance, you’ll have to provide even more evidence that your income is stable enough to make your monthly mortgage repayments. This can mean you'll need as many as 1–3 years of financial statements before you can start the mortgage application process.
Read more about mortgages for self-employed people.
Does the type of job make a difference?
The length of time you have to be in a job to get a mortgage depends on your career.
Jobs like policing, teaching, or working in the NHS generally make it easier to get a mortgage when you’ve just changed jobs. Lenders assume that if you do lose your job, you’ll be able to find one with a similar salary in the same field.
Likewise, if you’re starting a new contract with the same company or you’re moving to a new job in the same field on a steady income level, your lender will probably be able to give you more options. This is because you’ve already shown that you’re experienced in the sector, so it’s a safe assumption that you’d find another position if your situation changed.
It’s when you’ve decided to make a complete career change that you’ll run into delays finding a good deal on your mortgage. If you’re moving to a new sector, you’re looking at a wait of 6–12 months before your mortgage options will start to open up.
If you can, it’s best to either:
- Move jobs, wait until you’ve settled, and then apply for a mortgage with your first year of payslips and other evidence.
- Buy a property before you start your job search.
On the other hand, one of the most common reasons for buying a new home is that you’ve got a job in a new area and need to relocate. In an ideal world, you probably wouldn’t choose to deal with the stress of moving house and moving jobs at the same time, but often there isn’t a choice. So, how can you improve your chances of getting a mortgage after moving jobs?
How to improve your chances of getting a mortgage while switching jobs
If you do have to apply for a home loan when you’ve recently changed jobs, these things can help you get a better deal:
1. Use a mortgage broker
You can research mortgage providers alone, or you can go through a broker who knows the market, has access to conventional and specialist lenders, and has the experience to advise you on the best path to take.
Habito has access to over 20,000 deals from over 90 lenders. You can use our free mortgage calculator to get you started.
2. Collect information on your employment status
Gather your payslips, your tax statements, and maybe a letter from your employer about your contract. Along with a good credit score, anything you can add to your application to show you have a stable income can help.
3. Pay a larger deposit
Being able to pay a larger deposit may also open up mortgage deals that otherwise wouldn’t be available until you’d been in your job for longer. And if you have substantial savings, an offset mortgage might also be an option (for example, if you have £20,000 savings and a £120,000 loan, you’d only pay interest on the first £100,000).