Length of employment is one of the main factors that mortgage lenders look to assess when rating your suitability and affordability for a home loan. But how long in employment for a mortgage is typical in the UK. Here’s our short answer:
Some lenders will require you have been in employment for up to 3 years with the same company. But there are other lenders in the market who will only look for you to be employed as little as 3 months. A specialist adviser will help you find the best lender.
We have a large panel of UK independent advisers who specialise in helping with hard to place mortgages. Working with people who have only been employed for a short length of time is one area they frequently work in.
How our advisers can help you
If you have been turned down by the high street lenders due to not being employed for a long enough time, then contact us today for a no-obligation chat on how we could help you find the best adviser and lender.
How long do you have to be employed to get a mortgage loan?
As a general rule of thumb, the less time you have spent working for your current employer, the more of a risk you present to a mortgage lender.
But that doesn’t always offer an accurate barometer on your affordability, as people will frequently change jobs and employment to get better pay for themselves.
Whilst you know that you can well afford a mortgage, lenders are far more risk-adverse these days due to changes in legislation. That will often mean you are turned down for a loan, simply because you have recently changed jobs.
For people that have only been employed for less than a year with their current employer, this can prove very problematic.
So, how long in employment for a mortgage is standard?
Well, with the notes above in mind, the majority of high street lenders will require at least 12 months, some even as much as 3 years.
If you have just changed jobs, this could present you with a huge issue, and dash your plans for getting onto the property ladder.
But don’t panic.
Our advisers have access to lenders where this won’t be the case, with some lenders prepared to offer a mortgage loan to people with as little as 3 months in their current job role.
Why is length of employment or changing of jobs a problem?
But why is length of employment or a job change such a problem with mortgage applications?
It’s for a few reasons which we will highlight below.
1. Your job might not be secure
Lenders don’t like to take risks with offering large mortgage loans. They take the stance that a newly employed person could be more exposed to redundancy when compared to longer term employees.
Many companies work on a last in, first out basis, meaning people who have recently changed their job to work in a new role, could be the first to be made redundant.
Whilst redundancies are dropping in the UK (according to national statistics), mortgage lenders will view your new employment status as being indicative of being a possible credit risk and ability to repay a loan in the future.
2. You will still be in a probation period
Most jobs place new employees in a 3-month probationary period.
That can make applying for a mortgage tricky, as lenders don’t have the security of knowing you will still be in your job role come the end of this period.
3. It could indicate you move jobs frequently
Lenders will also look at your frequency of employment history, and a person who switches from job to job could indicate an applicant prone to losing their job frequently.
That alone, whilst it might not be the case with your personally, could indicate a risk of future unemployment and affordability.
4. You might not have regular wage slips and employment history
All mortgage lenders also require historical payslips when applying for a home loan. New employees who have changed jobs might not have that record of employment.
It’s a factor that is used to assess affordability, as lenders want to see proof that you earn regular and stable income that will let you make regular monthly repayments on the loan.
Whilst the points above are typical of many high street lenders, it is not always the case with alternative mortgage companies. Contact us now to speak with an adviser who has access to lenders more likely to take your application on a case by case individual basis.
What you can do to improve your chance of success
You now earn more money than before
If you have changed jobs and are now earning more in your new role than your previous employment, then that can certainly improve your chances.
By seeing a higher salary than recorded on previous payslips, lenders can look on your risk in taking out a mortgage loan far more favourably.
You now earn less than before
Moving jobs to start a role with lower pay than before means how much you can afford to repay on a mortgage offer will reduce.
Lenders will then offer you a lower mortgage loan, so you might to re-set your expectations on the price of the properties you are looking at.
If you are already in the process of a mortgage application, switching jobs to a lower pay scale, then you must make the lender aware to check that the mortgage offer still stands.
Only change jobs once you have purchased your home
Aside from speaking with a specialist adviser such as the ones on our panel, there is something that you should also consider.
With many lenders wanting to see that you have been with your company for a good length of time, you might want to hold off on changing your job before you have a mortgage offer agreed.
In most cases, you should ideally be employed in your current told for at least 3 to 6 months before applying for a mortgage.
However, it really does depend on the lender or building society as they will all have their own qualifying criteria and scoring process.
This is where our advisers become really valuable, as they have an understanding on which lenders look for what type of employment lengths and proof of income.
What to do next
We hope that we have helped you with our answer to your question “how long do you have to be employed to get a mortgage loan”. As you can see, lenders will differ, but generally speaking, a shorter employment length can narrow your options.
However, no matter how long you have been in your current job for, our advisers should be able to help you find the right mortgage deal for you.
They will help you structure your application, develop all documentation required, and then submit that to the right lender most likely to accept you for a mortgage loan.
That application will be sent to the lender not just most likely to accept you, but also one which will offer the best rate and deal currently available for your employment circumstances.
It’s worth working with an adviser who can hunt around for the best deal and support you in the process, as even if you have changed jobs, you could be on the first steps to home ownership sooner than you think.
To get started, call or contact our friendly team today who will explain the steps on a no-obligation basis.