New Job Mortgage
New Job Mortgage
A new job mortgage is quite common these days. People change jobs all the time, and with this can come the need to relocate, or buy your first or next house. This guide should answer many of your questions. If there’s something you still want to know about new job mortgages, just give me a call.
Last Updated: 26th September 2021
New Job Mortgage
Can I get a mortgage if I’ve just started a new job?
Yes, so long as you apply to one of the right lenders. In fact, you can apply and even complete the mortgage before your new job starts so long as you have a permanent contract.
If your contract is a fixed term contract, or other type of contract such as agency work it’s a lot harder but there are still options for fixed term contracts.
Not many mortgage lenders will offer mortgages to people in a new job. Some want to see the first payslip, some require you to have been employed for 6 month. It’s important to make sure you apply to the right one.
What if I’m on probation at my new job?
Applying for a mortgage in your probation period is fine with the new job friendly lenders. However, there are some lenders that a probationary period isn’t acceptable with.
What if it’s my very first job?
There’s a couple of lenders who are absolutely fine with considering you even if it’s your very first job. I find that sometimes they ask for larger deposits, especially if you have a ‘thin’ credit file. This means that there isn’t much data on your report to help them make their decision.
There are a few lenders that will accept your new job only if you’ve been employed continuously elsewhere for six months.
Does my occupation or industry affect a new job mortgage?
No. The very best new job mortgage lenders will consider you regardless of your occupation, so long as you’re a permanently employed applicant.
There are a few lenders that wouldn’t usually lend to people in a new job, however they make exceptions for newly qualified teachers and other professional roles.
When can I apply for a new job mortgage?
Before you even start!
So long as you have your signed contract for a new permanent role there are several mortgage lenders available that can consider your application up to 3 months before your new role starts.
There is even one that can consider your new job six months before the start date.
You may be able to apply and complete on the mortgage before even starting the job if everything moves very quickly.
What deposit is needed for a new job mortgage?
New job mortgages are available with deposits as low as 5%.
The larger the deposit you have, the more likely you are to be accepted, and the lower cost mortgage you can get.
Sometimes if you don’t have much credit history it can be harder to get a new job mortgage with a small deposit- this is only usually a problem if it’s your first job though.
How much can I borrow for a new job mortgage?
The first thing lenders will look at when deciding how much you can borrow is your salary. A very rough guide is to times this by 4.5 as most lender maximum falls around here.
If you are earning over £60,000 some lenders may allow you to borrow 5 times you income.
If you are a first-time buyer then one lender will even consider lending you 5.5 times your salary if you are a first time buyer with sole income of £31,000 or joint income of £50,000, but you must have at least a 10% deposit.
Generally you won’t have the amount you can borrow reduced as a new job borrower compared to somebody in the same financial situation who isn’t changing jobs.
The other thing lenders will look at is your committed expenditure, things like car finance, credit card debt. The more you have the less they will lend.
Are interest rates higher for new job mortgages?
No not really. The interest rates for people applying for mortgages at the same time as starting a new job are some of the best on the market. You can still get a great mortgage deal without waiting months to apply.
Remember, selecting the lowest cost mortgage is not just about the interest rate though. Other costs including arrangement fees, valuation fees, and cashback need to be considered when calculating the lowest cost option. A mortgage broker can do all of this for you, often for free.
Is it a good idea to get a mortgage when starting a new job?
This completely depends on your personal situation.
For some people a new job will be the key that literally unlocks their first or next house. For other, they may think that the new job won’t be a long-term thing and therefore don’t want the commitment of a mortgage and owing a property.
This is a very personal decision. Read my article on “Is now a good time to buy?” for my full answer to this question.
What if my new job is in a different area of the country?
If your new job is going to require you to move, so long as your new place of work is a realistic commuting distance to the place your applying for a mortgage on, this shouldn’t be a problem.
Say your new job is in Manchester and you’re applying for a mortgage on a house in London, that’s not realistic.
However, if your new job is working from home then this shouldn’t be a problem. A lender might need a letter confirming this, or see that it’s written into your contract.
They want to be sure you won’t have to rent a second home closer to work which could make it harder to keep up on the repayments on your mortgage.
What documents are needed for a new job mortgage?
Most lenders want to see payslips to prove your income. However for a new job you won’t have these.
Typically you’ll need to provide your new job contract which is signed, shows it’s a permanent role, has a start date in the next 3 or 6 months, and the salary you’ll be on.
You may also be asked for an offer letter or some form of communication from the employer to confirm that you accepted the offer.
The lender may also want copies for your bank statements to check your expenditure.
Can a pay rise be used for a new mortgage?
The new job mortgage lenders typically apply the same rules to pay rises as they do new jobs. That’s true whether it’s a pay rise with an existing employer or a pay rise by going to a new company.
How much does advice for a new job mortgage cost?
New job mortgages are quite straight forward so long as you know the lenders to apply to. Most mortgage brokers are familiar with this and I have done a lot of mortgages for people in this position. Many a mortgage advisor will charge for even the simplistic of cases though.
For new job mortgages I don’t charge a fee. So long as the rest of your situation is straight forward, ie no bad credit, buying a normal property, you’ll have lots of fee free mortgage brokers able to help you, including me.