How does a new job impact your mortgage application?

Person completing mortgage application holding Gray Twist Pen and White Printer Paper on Brown Wooden Table

How does a new job impact your mortgage application?

Applying for a mortgage can be a stressful time (we do try to make it as stress free as possible!) and there is a lot of information to collate and submit. Any loan application will require the lender assessing your employment and income to ascertain how secure and reliable your income is. This doesn’t mean your affordability will be solely based on your employment length of service and status – there are other factors they consider: age, income and credit history.  Some lenders will also look at your profession; professions that are considered more stable or in demand could impact your application, such as solicitors or a doctor for example.

But how could a new job impact your mortgage application?

When you start a new job, you will automatically be put onto probation. This is a period in which you and your employer both assess whether things are working out, and if they are not, you could find yourself let go. Some mortgage lenders will not accept an application from individuals who have only worked for a short amount of time with their employers for this reason. Another factors that lenders would consider includes if your employer needs to make redundancies as you would again be most at risk, as newest members of staff are usually the first to go – however this isn’t always the case, we have lenders that accept day 1 starts, people in probation periods if you’re in the same industry and some will accept an offer of employment where you are due to start in the future.

New job – lower salary

If you are switching to a lower salary, this will impact your affordability and how much the lender would be willing to offer you for your mortgage. You will need to consider whether this is the right move for you at that time.

New job – higher salary

If you start a new job and you are on more money than before, you mortgage lender may be able to increase the amount you can borrow – proof will be required, such as wage slip to prove this increase or offer letter. Alternatively, if you are happy with how much you are borrowing, a higher salary could mean you could pay off larger amounts and therefore save on interest in the long run.

New job – salary commission based

When mortgage lenders look at your salary, they tend to average your monthly income over a set period of twelve for example.  Your basic salary will be combined with consistent commission to get your overall annual salary. However any commission and bonuses can impact your borrowing affordability and new jobs with a low basic salary and no proof of commission earnt will seriously harm your application.

If you are looking to apply for a mortgage or get a new deal on your current mortgage and you are also changing job or weighing up your options, speak to the friendly team at Best 4U for some further advice regarding your affordability.

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